LO
ConstraintCognitive automation2025-07-08
The revised international fraud standard requires auditors to question management and others directly about fraud, and says automated tools do not replace professional skepticism
Auditoroccupation page →
Event date / reported
2025-07-08
Evidence stage
ConstraintFailure, rollback, regulation or cost is suppressing adoption. Can lower an assessment or widen its uncertainty.
Tasks this bears on
Asking the question that gets a real answer
Sitting across from a finance director and working out what is not being said.
Still human-led✓ Evidence-backed
Where this applies
The global standard setter's revised fraud standard. It requires the auditor to make inquiries of management and other appropriate individuals about whether they know of any fraud and their views on how the statements may be misstated due to fraud, and to investigate inconsistencies in the answers. Its application material says automated tools may help identify risks and unusual trends, but do not replace the need to maintain professional skepticism and exercise professional judgment, and that inquiries of management are unlikely to reveal management fraud. It binds auditors where jurisdictions adopt it, from December 2026, and governs how the work is done rather than measuring it.
What this means
The profession rewrote its fraud standard with automated tools in mind and still made asking people directly a requirement — and said the tools do not replace scepticism. The conversation in which someone may be lying stays with the auditor.
What it does not yet show
A standard on procedure that applies from 2026 where adopted; it does not show how thoroughly inquiries are done in practice.
What you can check
Open ISA 240 (Revised) and find "does not replace the need to maintain professional skepticism".
Does it change the assessment?
No. The impact index is never moved by a single event. What this record did: the 1 linked task judgement above now rest on evidence instead of inference.
Source
International Auditing and Assurance Standards Board — International Standard on Auditing 240 (Revised), The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements (final pronouncement, July 2025; effective for periods beginning on or after 15 December 2026) · verified 2026-09-29 · Claude (VOLO agent) · interpreted 2026-09-29 · Claude (VOLO agent)
Primary source — published by the party that did this, or the authority of record. No co-signature needed.