The correct answers are: Members of the engagement team should discuss the susceptibility of the entity's financial statements due to fraud; The auditor, should identify and assess the risks of material misstatements in the financial statements due to fraud.

ISA 240 The auditor's responsibilities relating to fraud in an audit of financial statements states that discussion amongst the engagement team shall place particular emphasis on how and where the entity's financial statement may be susceptible to material misstatement due to fraud, including how fraud might occur.

It also emphasises the importance of maintaining an attitude of professional skepticism recognising that a material misstatement due to fraud or error could exist notwithstanding the auditor's past experience with the entity about the honesty and integrity of management.