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Company Auditors Face More Rigorous Role in Spotting Fraud: Global Body *Centurion Insurance AFS*

Feb 08, 2024 (0) comment , , , , , , , , , , ,

Accountants must play a role in spotting fraud when they check the books of companies, a global standard setting body for corporate auditing said in robust proposals Feb 6.

The International Auditing and Assurance Standards Board (IAASB), which writes norms for auditors, said recent corporate failures across the world have underscored the importance of clarifying and enhancing the role of auditors in responding to fraud and suspected fraud.

“While auditors are not policemen, they can and must play a role in identifying and responding to material misstatements of the financial statements due to fraud and communicating their work to users,” IAASB chair Tom Seidenstein said in a statement.

The proposals, put out to public consultation until June, revise and strengthen an existing rule to clarify auditor responsibilities relating to fraud in an audit, and enhance documentation requirements about fraud-related procedures.

IAASB norms are applied by auditors such as KPMG, EY, PwC and Deloitte or the “Big Four” that dominate corporate auditing in many countries.

Accountants have argued they are just one piece of a jigsaw that includes regulators and company boards.

Efforts to put more responsibility on auditors in Britain to spot fraud increased after accounting scandals at Patisserie Valerie cafe chain and elsewhere, though plans to legislate for a more powerful regulator are still in limbo.

Britain is also tightening responsibilities on company boards to ensure accuracy in statements.


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