ARE AUDITORS LOOKING FOR FRAUD WHEN PERFORMING AUDITS?
Auditors are not specifically searching for the existence of fraud. However, while conducting audits in accordance with the Institute of Internal Auditor’s “Standards for the Professional Practice of Internal Auditing,” improper activities may be identified. A good system of internal controls and a control conscious organizational environment will reduce this risk.
According to Standard 1220 of the International Standards for the Professional Practice of Internal Auditing, internal auditors have a responsibility “to exercise due professional care in performing audit work to the degree that fraud may be present in activities covered in the normal course of audit work.” As part of the assurance activities, auditors of Internal Audit watch for potential fraud risks, assess the adequacy of related controls and make recommendations for improvement. However, it is management’s responsibility to identify potential areas of risk and to be aware of the possibility of fraudulent acts in these areas.
