I would just say a couple of things in this area. Auditors have always been expected to have what we call “professional scepticism”. That is, we do look for evidence and support for positions taken or for a set of financial statements to make sure that the figures do have integrity.
The second thing, as Sheila has mentioned, is that particularly with the adoption of the risk-based approach to auditing, where the auditor is forever assessing the risk of material misstatement in a set of financial statements, clearly, fraud and error need to be factored into that consideration. The auditor quite appropriately needs to assess the risk of fraud and error.
If you look at the auditing standard on the auditor's consideration of fraud in a set of financial statements, it actually says that even if the auditor believes that the integrity of the entity you're auditing is of high standing, you should put that view aside in your consideration of the risk of fraud and consider: if this board was up to no good--if I can use that expression--how might they perpetrate fraud in terms of the financial reporting of the state of affairs of that entity?
There's no question that since Enron and other collapses the audit profession has been on notice about seriously considering the risk of fraud. Hence, now in the standards there are firm requirements for discussions amongst the audit team about assessing the risk of fraud and for the discussions that Sheila mentioned, the discussions with the entity management.
It is not to suggest that the organizations are criminals, but it is to try to suggest that the auditor has this obligation to test the risk of fraud and to put in place procedures designed to make sure, when they provide the opinion on the financial statements, that there is only a very slight chance of that opinion being incorrect.
So it is a global move. This risk standard that Canada applies is the same as the international standard, but it's a more recent development.