A Refresher on Fraud and the Responsibility for Its Detection
A Refresher on Fraud and the Responsibility for Its Detection
Mastering accountants' responsibilities in fraud prevention for assurance engagements
The article outlines the responsibilities of accountants in relation to fraud within assurance engagements. It distinguishes the responsibilities in preparation, compilation, review, and audit engagements. In preparation and compilation engagements, accountants need to obtain management's acknowledgment of their responsibility for preventing and detecting fraud. In review engagements, accountants are required to make inquiries about the existence of any actual, suspected, or alleged fraud. When indications of fraud are found, the accountant should communicate it to the appropriate level of senior management or those charged with governance. For audit engagements, auditors are responsible for obtaining reasonable assurance that the financial statements are free of material misstatements due to fraud or error. They must maintain professional skepticism, make inquiries about fraud risks, and document their assessment and responses. The auditor's report includes sections outlining management's and the auditor's responsibilities for the financial statements. For more information click the link!
