Auditing | August 20, 2026
AICPA Auditing Board OKs New Standard Clarifying Auditors’ Role in Detecting Fraud
A new standard that clarifies and enhances auditors’ responsibilities for identifying fraud or suspected fraud in a financial audit statement was approved by the AICPA’s Auditing Standards Board on Aug. 20.
The ASB’s adoption of Statement on Auditing Standards No. 151, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, supersedes SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, as amended (Section 240, Consideration of Fraud in a Financial Statement Audit), and amends several other standards.
According to the AICPA, the new standard helps auditors more clearly understand their role in assessing risks of material misstatement due to fraud and their response when fraud or suspected fraud is identified in a financial statement audit.
SAS No. 151 strengthens audit procedures related to fraud while reinforcing that management and those responsible for governance of an entity remain primarily responsible for preventing and detecting fraud. The standard doesn’t change the definition of fraud, nor does it change the auditor’s overall objective of obtaining reasonable assurance that financial statements are free of material misstatement due to fraud or error. But it does add more specific requirements designed to improve auditor skepticism, fraud risk assessment, documentation, communication, and responses when fraud is identified or suspected.
“It is critical for auditors to remain alert to the possibility of fraud throughout an audit engagement,” Jennifer Burns, the AICPA’s chief auditor, said in a statement. “This standard reinforces the importance of professional skepticism and provides clearer direction for how auditors should respond when fraud is identified or suspected.”
