3-29 Management fraud (e.g. fraudulent fi nancial reporting) is a relatively

3-29 Management fraud (e.g. fraudulent fi nancial reporting) is a relatively
rare event. However when it does occur the frauds (e.g. Enron and
WorldCom) can have a signifi cant effect on shareholders employees and
other parties. SAS No. 99 (AU 316) provides the relevant guidance for
auditors.

Required:
a. What is the auditor%u2019s responsibility for detecting fraud?
b. Describe the three conditions that are generally present when fraud
occurs?
c. What are the objectives of the %u201Cbrainstorming%u201D meeting that is held
among the engagement team members?
d. What is the required documentation for identifi ed risk factors?