How is Fraud detected?
As Certified Public Accountants and auditors we tend to have an egocentric opinion, which overstates our importance in the detection of fraud. In reality almost double the amount of fraud is discovered by pure accident than is discovered by outside auditors. As Certified Public Accountants and auditors, we should not take pride in this fact. Mark Twain once wrote, “Having lost site of our objective we redoubled our efforts.” I believe that the same can be said for the accounting profession. We keep issuing pronouncements at an ever-increasing pace. We try to address every esoteric and theoretical concern that one would expect to see on a college campus. The public’s primary expectation of the accounting profession is that it detects theft and fraud. The fact that we have failed to meet that expectation is undeniable. The government finally got tired of our profession’s continued failure and set up the Public Accounting Oversight Board under the Securities and Exchange Commission to reg
