Most Fraud Not Detectable In An Audit

By on March 21, 2019

March 21, 2019

Companies often rely on auditors to find fraud, but auditors are not looking for fraud and are unlikely to uncover it in the ordinary course of business. Their task is determining the accuracy of financial statements provided by the client. Most fraud, such as kickbacks, code violations and shell company schemes – occurs off the books. Unless auditors are specifically asked to perform a forensic audit they are unlikely to uncover misconduct. The Association of Certified Fraud Examiners found that in 2018 that more than half of occupational fraud was detected by employees. Internal and external audits identified fraud 15 percent and four percent of the time, respectively. Risk professionals rely on both outside and internal information, including interviews, government records, media and databases and crime detection techniques. They often unearth schemes when everything adds up on paper.
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