CHICAGO (June 11, 2014) – Deterring and detecting fraud within an
organization is the responsibility of several groups: financial executives,
boards of directors, audit committees, internal auditors and external auditors.
To avoid complacency, Crowe Horwath LLP, one of the largest public accounting
and consulting firms in the U.S., recommends that each of these groups practice
white paper: “Skepticism: A primary weapon in the fight against fraud.” www.crowehorwath.com/skepticism.)
skepticism occurs when those responsible for fighting fraud take nothing for
granted, continuously question what they hear and see, and critically assess
all documents and statements, according to Jonathan Marks, a partner and the
leader of Crowe fraud, ethics and anti-corruption services.
is a professional hazard and a fraudster will prey on it,” said Marks. “For
example, a cunning fraudster will take advantage of audit deadline pressure by
diverting an auditor’s time and attention to areas that are unlikely to raise
concerns and saving problematic areas until the engagement’s end, when time is
short. Recognizing and resisting this tactic requires the application of
professional skepticism – not only on the part of the external auditor but by
the others involved in the process as well.”
suggests all stakeholders take the following steps to encourage professional
the role of the independent reviewer or inspector, particularly of your own
assumptions. A professional skeptic continuously challenges his or her beliefs
and belief-based risk assessments. Critical self-assessment is necessary to
demonstrate to others why and how beliefs and assessments are justified.
an effort to resist complacency. Question whether you are placing undue weight
on prior risk assessments or discounting evidence inconsistent with your
alert to pressure. Pay particular attention to pressure to truncate risk
assessment procedures or make unwarranted assumptions to beat time constraints.
This step is especially important as deadlines approach.
the sources of evidence. Identify and assess audit risks from multiple
perspectives, using multiple sources of evidence.
aware of the relative reliability of various types of evidence. In general,
documentation from internally generated documents – particularly those that are
generated manually or not linked to other reporting systems – is less reliable
as evidence than documents generated by external sources such as banks or
knowledgeable skepticism is a professional asset for auditors, board members
and financial executives. By challenging their own assumptions – and creating
an environment in which challenges are encouraged and supported – companies
will not just deter fraud but make its detection more likely,” Marks said.
Marks will be
speaking on fraud at the 25th annual ACFE (Association of Certified Fraud
Examiners) Global Fraud Conference in San Antonio, Texas, June 15-20.
Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and
consulting firms in the United States. Under its core purpose of "Building
Value with Values®," Crowe uses its deep industry expertise to
provide audit services to public and private entities while also helping
clients reach their goals with tax, advisory, risk and performance services.
Crowe and its subsidiaries have offices coast to coast with more than 3,000
personnel. The firm is recognized by many organizations as one of the country's
best places to work. Crowe serves clients worldwide as an independent member of
Crowe Horwath International, one of the largest global accounting networks in
the world, consisting of more than 150 independent accounting and advisory
services firms in more than 100 countries around the world.
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