Adoption of PSA 240 on Fraud and Error in Audits

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PRC BOARD OF ACCOUNTANCY Resolution NO. 14, SERIES 2004: Adoption of PSA 240 on Fraud and Error in Audits

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Title Source: Supreme Court: Adoption of PSA 240 on Fraud and Error in Audits

Law: Prc Board Of Accountancy No. 14, Series 2004

Decision Date: Feb 9, 2003

The PRC Board of Accountancy adopts Philippine Standards on Auditing (PSA) 240, outlining auditors' responsibilities to consider fraud and error in financial statement audits, effective 15 days post-publication.

Scope and Purpose of PSA 240

PSA 240 outlines the auditor's responsibilities to identify and respond to the risks of material misstatement in financial statements due to fraud or error.
It serves as a guideline to enhance audit quality and reliability by emphasizing vigilance against fraudulent activities and errors during financial audits.

Implementation and Compliance

The Board of Accountancy formally adopted PSA 240 as part of the Philippine Standards on Auditing.
Compliance with PSA 240 is mandatory for all practicing CPAs in the Philippines involved in auditing financial statements.

Effective Date and Publication

The resolution, along with the PSA 240 document, shall take effect fifteen (15) days after its publication in the Official Gazette or a newspaper of general circulation—whichever occurs earlier.
This provision ensures public awareness and gives practitioners time to adjust to the new standards.

Legal Authority and Signatories

The resolution was adopted by the Board of Accountancy on February 9, 2003.
It was signed by the chairman, vice-chairman, members of the Board, and attested by the Secretary of Professional Regulatory Boards.
The resolution was also approved by the Chairperson and Commissioners of the Professional Regulation Commission, thereby giving it full regulatory force.

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