Problem
As you know, financial audits are not designed to detect actual fraud. They are designed to provide reasonable assurance that the financial statements as a whole are free from material misstatement, whether caused by error or fraud.
This is a primary reason why “clean” audit reports could exist right along actual fraud, year after year. In some cases, fraud was discovered too late to save the firm from financial distress or collapse.
Understanding audit scope limitations and being proactive about fraud risk factors can help to protect your company from financial fraud.
Solution:
We can assist management and those charged with governance to carry out their responsibility of prevention and detection of financial fraud. For example, we can help in addressing fraud risk factors such as:
- Asset misappropriation
- Potential kickbacks
- Expenses manipulation
- Improper disclosures
- Overstated assets
To reduce fraud risk factors, we can assist in the design and implementation of effective internal controls. Internal controls and good governance can help to mitigate actual fraud. When working as designed, internal controls can reduce the possibility of committing and concealing fraud through collusion.
Please call us to discuss your specific situation.