External Auditors
The external auditor provides reasonable assurance that financial statements are free of material misstatement, including from fraud, and they must be independent of the company they audit. The Anti-Fraud Collaboration shares resources to help external auditors understand their role in the deterrence and detection of fraud.
The shared responsibility of fighting fraud is a key theme throughout our resources. Skepticism is one of the traits we encourage across stakeholders in the financial reporting supply chain to help deter and detect fraud. Of course, auditing standards require that external auditors exercise professional skepticism, so our resources that explore ways to hone skepticism are particularly useful for external auditors.
While management should encourage communication between employees at all levels and ensure boards, audit committees, and internal and external auditors are well informed on a timely basis about the company’s operations, strategies, and risks, we examine considerations external auditors should keep in mind when exploring how to maintain open communication in the audit process.
In performing the audit, external auditors have the unique opportunity to assess highly subjective and complex ideas like technical expertise and professional demeanor of the issuer’s financial reporting staff. We have taken the time to research and report on difficult accounting issues like these, which may arise in the course of the external auditor’s work.
Looking At Culture From The Outside
Based on their interaction with company personnel of various departments and levels, external auditors have a unique perspective on a company’s culture. The Anti-Fraud Collaboration details how external auditors can provide their views to the audit committee and identify where they can consider culture in the planning and performing of audit procedures.
Staying Attuned to Quantitative and Qualitative Metrics
The SEC often identifies issues like culture, high-pressure environment, and business challenges as fostering an environment more conducive to fraud. Auditors must stay attuned to quantitative and qualitative metrics to help mitigate fraud risk. Through the Anti-Fraud Collaboration’s work, auditors are given the resources to assess risk through their role.
Underscoring the Value of the External Auditor
While assessing audit evidence, practicing professional skepticism is crucial for external auditors in order to help spot red flags that others may miss. The Anti-Fraud Collaboration provides resources on how external auditors can better exercise professional skepticism to fight fraud.
Does Technology Challenge Our Ability to Exercise Skepticism?
New technologies can pose a challenge to exercising skepticism that may be easily overlooked. The very fact that emerging technologies are greeted with great fanfare and anticipation reinforces the importance of striving to maintain skepticism in considering the information these technologies deliver. Through its work, the Anti-Fraud Collaboration details what emerging technologies may mean for external auditors.
Culture
Looking At Culture From The Outside
Based on their interaction with company personnel of various departments and levels, external auditors have a unique perspective on a company’s culture. The Anti-Fraud Collaboration details how external auditors can provide their views to the audit committee and identify where they can consider culture in the planning and performing of audit procedures.
Risk
Staying Attuned to Quantitative and Qualitative Metrics
The SEC often identifies issues like culture, high-pressure environment, and business challenges as fostering an environment more conducive to fraud. Auditors must stay attuned to quantitative and qualitative metrics to help mitigate fraud risk. Through the Anti-Fraud Collaboration’s work, auditors are given the resources to assess risk through their role.
Skepticism
Underscoring the Value of the External Auditor
While assessing audit evidence, practicing professional skepticism is crucial for external auditors in order to help spot red flags that others may miss. The Anti-Fraud Collaboration provides resources on how external auditors can better exercise professional skepticism to fight fraud.
Technology
Does Technology Challenge Our Ability to Exercise Skepticism?
New technologies can pose a challenge to exercising skepticism that may be easily overlooked. The very fact that emerging technologies are greeted with great fanfare and anticipation reinforces the importance of striving to maintain skepticism in considering the information these technologies deliver. Through its work, the Anti-Fraud Collaboration details what emerging technologies may mean for external auditors.
