The six biggest accounting firms in the United States have suggested that companies should be forced to submit to forensic audits every three to five years. These types of engagements would be aimed at finding fraud.
The six firms include PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, KPMG, Grant Thornton and BDO Seidman. They say their proposal is aimed at starting discussions about what investors should expect from auditors when it comes to fraud. (Incidentally, traditional independent audits are not designed to detect fraud, and the users of financial statements are mistaken if they think the audits will detect fraud.)
One accounting educator remarked that audit firms should just change traditional audits to be “done properly” and detect fraud.
Tags: forensic, fraud, accounting
09 Nov 06 at 11:35 pm
I hate to complain…but I will do it anyway.
Why can’t you quote who said “audit firms should just change traditional audits to be done properly and detect fraud.”? One accounting educator isn’t as forceful of a statemenmt as Joe Smith, AICPA Lecturer, states…
When I read anonymous quotes I often wonder if they are made up. I doubt you made it up…but why not give the name so that the reader can determine the persons motivations, biases, and authority on the subject
10 Nov 06 at 11:23 am
I guess I didn’t name her because it’s not a name anyone would recognize anyway. But here you go: Mary Ellen Oliverio.
28 Nov 06 at 11:55 am
Is anyone aware of an available whitepaper that would detail the steps one would take to perform an enterprise wide forensic audit as described in the report?
Michael Tynan, CFE