The Public Company Accounting Oversight Board has issued a document advising auditors to beware of unusual transactions that could be signs of fraud.
Staff Audit Practice Alert No. 5, “Auditor Considerations Regarding Significant Unusual Transactions,” includes the relevant requirements from several existing PCAOB auditing standards about significant unusual transactions to help auditors detect potential errors or fraud while reviewing interim financial information and auditing financial statements.
The alert covers subjects such as identifying and assessing risks of material misstatement; responding to the risks of material misstatement; consulting others; evaluating financial statement presentation and disclosure; communicating with audit committees; and reviewing interim financial information.
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