Fraud is always on the minds of auditors, but in the current economic environment it should appear as a flashing red light. Opportunity, rationalization and motive, the three pillars of the fraud triangle, can be extremely high in a recessionary period, like the one we are seeing today. What types of fraud are being perpetrated today? How can auditors be more aware and continue to fulfill their responsibilities under US GAAS? The financial statement auditor’s identification of fraud risk factors, their assessment of fraud risk, and their fraud risk responses are key to the auditor’s consideration of fraud and fraud detection and this session will highlight recent research conducted, the current schemes being seen and the auditor’s responsibilities with respect to fraud. Addressing the issue from all sides, this panel will examine the activities from the academic, forensic and practitioner points-of-view. Never a topic to overlook, with stories from the front lines, be ready going into your next audit when it comes to the potential for fraud.
Recognize the key results of recent academic research on fraud to update and inform practitioners, researchers, standard setters, regulators, and other stakeholders in the financial reporting process.
Identify the different types of fraud currently being seen in practice.
Recall the requirements for auditors with respect to fraud identification and detection under GAAS.
Recognize the importance of professional skepticism and how skepticism plays a key role in addressing fraud in a financial statement audit.