What technique does AU Section 240 suggest auditors use when assessing fraud risks?

The suggestion of brainstorming potential risks as outlined in AU Section 240 is an effective technique for auditors when assessing fraud risks. This approach encourages auditors to engage in group discussions that leverage diverse perspectives and insights. By bringing together a variety of team members, the brainstorming process allows the identification of various fraud scenarios that may not be immediately obvious to individual auditors. This collaborative effort promotes an in-depth consideration of how fraud could occur within the organization, facilitating a broader understanding of the risk landscape.

This technique helps ensure that potential red flags are not overlooked and that the audit team is more prepared to address the complexities of fraud risk. Additionally, brainstorming aligns with the guidance of AU Section 240, which emphasizes the auditor's responsibility to assess and respond to the risks of material misstatement due to fraud. It fosters an environment where team members can openly share thoughts and concerns, ultimately enhancing the effectiveness of the fraud risk assessment process.