“Troubled Audit Options” article by NYTimes’ Floyd Norris (June 9, 2011)

Great article by Floyd Norris of the NYTimes discussing how it’s largely up to the auditing industry to make some major changes in how audits are performed and to improve chances of spotting fraud.

You can read the full article by clicking here.

One Response

  1. Fraud is concealed. Auditors cannot work with concealed information, and should not be expected to find fraud. In an operations audit – not a financial statements audit – auditors can at best detect lack of controls which can lead to fraud or wrongdoing. Auditors do not look for fraud in an audit; they are not trying to find fraud.

    Fraud is ususally uncovered by an employee, by a member of Management, or by an outsider, and sometimes even by research analysts. And it is usually uncovered by chance, by accident, because, again, nobody looks for fraud. In the business pages, we rarely read of fraud uncovered during a routine audit. Sound business practices and controls are the best defence against fraud.

    In this particular case, Management itself is allegedly trying very hard to conceal.

    Hilger J.Hertell
    San Juan, PR

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