[The following paragraph 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.]


Evaluating the business rationale for significant unusual transactions. During the course of the audit, the auditor may become aware of significant transactions that are outside the normal course of business for the entity, or that otherwise appear to be unusual given the auditor's understanding of the entity and its environment. The auditor should gain an understanding of the business rationale for such transactions and whether that rationale (or the lack thereof) suggests that the transactions may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets.