Misappropriation of assets
Definition
The second ISA 240 fraud category. It involves theft or misuse of an entity's assets by employees or management: cash skimming, expense reimbursement fraud, inventory theft, or payroll manipulation. Individual instances may be immaterial, but cumulative amounts or systemic schemes can reach material levels.
Related terms
- Audit expectation gap
- The difference between what auditing standards require auditors to do and what the public, investors, or regulators believe auditors are responsible for....
- Fraudulent financial reporting
- One of the two ISA 240 fraud categories. It involves intentional misstatement or omission in financial statements to deceive users: overstating revenues,...
- ISA 240
- International Standard on Auditing 240, 'The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements,' issued by the IAASB. Sets...
- Material misstatement due to fraud
- A misstatement in the financial statements caused by intentional act (fraud rather than error) that is large enough, individually or collectively, to...
- Professional skepticism
- An attitude requiring the auditor to question information, remain alert to conditions that may indicate misstatement, and critically assess audit evidence rather...
Explained in
- Audit Standards and the Auditor's Responsibility for Fraud DetectionThe second ISA 240 fraud category. It involves theft or misuse of an entity's assets by employees or management: cash skimming, expense reimbursement fraud, in...