Should detecting fraud or other major infractions be part of an auditor’s professional duty of care or is it a step too far?
By Nina Hendy
Roger Darvall-Stevens
Director and national head of Fraud & Forensic Services, Australia, RSM
No, in short. This is a question that is often asked and an area that is often misunderstood. A leading global fraud study from the Association of Certified Fraud Examiners (ACFE) reveals that as a means of detecting fraud, external audit only features in 3 per cent of detected fraud cases.
The top three methods by which fraud is detected are tip-off, internal audit, and management review. External audit is not designed to detect fraud.
One component of the external audit process is to assess the…
