Why Auditors Fail to Detect Fraud

Overview:

SAS 122, AU 240, Consideration of Fraud in A Financial Audit state that auditors fail to detect fraud for two reasons.  One, they haven’t been trained to look for it and two, they don’t know what it looks like.  I would like to add a third reason: they don’t want to find fraud because it causes problems for the audit.

This session is designed to familiarize auditors with the many faces of fraud; where and how to look for them and what to do if you think you have found fraud.  Not everyone is able to recognize fraud.  During this program, the attributes a fraud auditor (frauditor) will be discussed.

In order to recognize fraud, an auditor must understand their client’s operation.  What is an indicator in one client’s operation may be business as usual in another and you must know the difference.

After viewing this program, chances are you will never look at your client the same way!

Areas Covered in the Session:

• Attributes of a fraud auditor
• the importance of professional skepticism, the Control Environment or the Tone At the Top
• the Big Monkey Theory
• Understanding the Entity and Its Environment
• The Pros and Cons of Documentation
• The Two Types of Transactions
• The Importance of Obtaining Verbal Assertions From Management
• How to Recognize a Fraudulent Transaction

Who Will Benefit:

• All