In the context of ISA 240 (The Auditor‘s Responsibility to Consider Fraud and Error in, an Audit of Financial Statements): Outline the procedures an external auditor should follow if he suspects that fraud; or error have been perpetrated

• Consider materiality. If the matter could not be material in the context of the accounts then take no further action, but if material, appropriate action must be taken. Again if he matter is material, perform appropriate additional tests.
• If it appears that irregularities have occurred and may be material, then consider the effects on the financial statements and ensure that these have been prepared with such adjustments and amendments as may be required.
• If further investigation is required and the accounts cannot be delayed, then the auditor‘s report may have to be qualified for uncertainty.
• In the event where errors or irregularities have occurred, ensure that top management is aware of such events.
• Any weakness in the system of accounting and internal control which may give or have given rise to error or irregularity should be fully discussed with and reported to top management.



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