As auditors attempt to restore trust in the profession, auditors explain what is needed to improve the audit industry particularly by spotting fraud, in the latest report by the Association of Chartered Certified Accountants (ACCA)
The series of roundtables with groups of auditors from across the world featured auditors from ACCA, Chartered Professional Accountants of Canada (CPA) and the Chartered Accountants Australia & New Zealand (CA ANZ). It also featured representatives from Canadian Auditing and Assurance Standards Board (CAASB).
The report showed that many audit practitioners questioned whether the presumption of ‘risks of fraud in revenue recognition was appropriate’. ACCA reported that this presumption led auditors to spend an ‘undue amount of time designing and performing fraud procedures where the risks are not high’.
As a result, the auditors felt that they were unable to devote time to ‘riskier areas’. The report suggests that the risk assessment should determine the fraud risks appropriately for the entity rather than be ‘presumed in all cases’.
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