When the auditor suspects that fraud may be present, he or she should:

Question

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When the auditor suspects that fraud may be present, the auditor should obtain additional evidence to determine whether material fraud has occurred. The auditor should perform further audit procedures in response to the identified risk of material misstatement due to fraud. Continuing with the original planned audit procedures or immediately resigning from the engagement may not be appropriate responses in case of suspected fraud. Informing ASIC may be required depending on the circumstances, but it is not the first step to be taken by the auditor.

When the Auditor Suspects That Fraud May Be Present, He