3/ AU sec. 316, Consideration of Fraud in a Financial Statement Audit, discusses fraud, its characteristics, and the types of misstatements due to fraud that are relevant to the audit, i.e., misstatements arising from fraudulent financial reporting and misstatements arising from asset misappropriation.
[The following footnote was effective for audits of fiscal years beginning before December 15, 2014. See PCAOB Release No. 2014-002 for audits of fiscal years beginning on or after December 15, 2014, or return to the current version.]