The importance of detecting fraud
As standard-setters move forward with initiatives around fraud and going concern, Katharine Bagshaw looks into the concerns and proposed reforms – and shares some ICAEW perspectives on progress.
Fraud is a notoriously tricky subject at the best of times. But the erroneous and persistent belief that auditors who didn’t detect a material fraud must have been asleep on the job is as old as the profession itself. Why?
Misunderstandings stem partly from the belief that frauds are, or should be, obvious to anyone with eyes to see, which is rarely the case. Fraud is defined legally in high-level terms and trials go to court because what actually constitutes a fraud is a matter of legal opinion and often unclear without the benefit of hindsight. Misunderstandings also arise because fraud is sometimes assumed to involve misappropriation of assets. But many major recent incidents are more in the nature of financial reporting frauds. This is complicated by the fact that fraud requires an element of intent – you cannot be guilty of unintentional fraud.
Continue reading
This content is not freely available. To access 'The importance of detecting fraud' you need to be one of the following:
-
ACA student
-
This content is available to ACA students. If you want to start the ACA qualification there are several routes you can take
-
Audit and Assurance Faculty
-
Stay ahead of the curve with our expert guidance, trusted technical resources and practical insights.
-
Business and Finance Professional
-
An internationally recognised designation and professional status from the ICAEW.
-
ICAEW member
-
Gain access to world-leading information resources, guidance and local networks. 98% of the best global brands rely on ICAEW chartered accountants.