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what are the auditor's duties as regards detection of fraud?

and the 2nd question is

what course of action should the auditor take if he detects a fraud committed by a director? assume the fraud is immaterial.
Dear,

Please consult the International Auditing Standard-ISA 240. I think it shall serve your purpose.


Regards,


*
You may also consult PAC's solved past papers. As this question has been tested alot! [)]
according ISA-240 the only Duty of auditor regarding Fraud is that the external auditor should make sure that Fraud which is committed is properly reflected in Financial statements and if there is an error, then it should be corrected.

Originally it is the duty of Management(internal auditor in particular) to prevent or detect and correct Fraud and inform External auditor about any known past fraud.

If the fraud is committed by only one director, then material or immaterial it should be comunicated to Those charged with governance but if it involves all those charge with governance then it should be communicated to legal authority by the auditor after consulting the situation with his lawyer.

Hope that'll answer ur query.

Salman
Also consult standard format of auditors' report, that will help you understand the extent of responsibility of auditor towards detection of fraud.

Frauds are rarely detected by statuory audits
As Simple as u like...
Detecting fraud is not auditor's responsibility...
But detecting fraud tht causes material misstatement in the financial statements is auditor's responsibility....
if the auditor detects fraud.......he will charge higher fee next time.....
An auditor is not bound to be a detective, or
… to approach his work with suspicion, or with
a foregone conclusion that there is something
wrong. He is a watchdog, not a bloodhound.’

‘An auditor conducting an audit
in accordance with ISAs is responsible for
obtaining reasonable assurance that the financial
statements as a whole are free from material
misstatement, whether caused by fraud or error.’
ISA 240 (Redrafted), paragraph 5.

Hence, both the entity itself and the auditors
have responsibilities for fraud and error. It could
be said that management, and those charged
with governance, have the primary responsibility
for fraud and error, whereas the auditor has a
secondary responsibility. It is important, however,
to ensure that the extent of these secondary
responsibilities are clearly understood,

The Auditor’s Responsibility
to Consider Fraud in an Audit of Financial
Statements, which became effective for periods
commencing on or after 15 December 2004.
According to ISA 240 (Redrafted) the difference
between fraud and error depends upon whether
deception has been used, and the distinction
between the responsibilities of those charged
with governance and auditors for fraud prevention
can be described respectively as primary and
secondary responsibilities. Auditors are required,
however, to maintain an attitude of professional
skepticism throughout the audit, and members
of the audit engagement team are required to
discuss the susceptibility of the entity’s financial
statements to material misstatement due to fraud.
ISA 240 (Redrafted) requires auditors to
perform risk assessment procedures to obtain
information for use in identifying the risks of
material misstatement due to fraud.
kindly tell me the e-mail id of different auditors
actually hm role of auditor to dedect fraud in pakistan pe research kar rahy hain.jis k liye hmain auditors k e-mail id require hain ta k un se questionnaire fill krwa saky.plz