PracticeAuditUS CFOs reject auditors’ role in detecting fraud

US CFOs reject auditors’ role in detecting fraud

A Grant Thornton survey of US CFOs and senior comptrollers shows a majority of 86% reject the auditor’s responsibility to detect fraud

When
Grant
Thornton
asked US chief financial officers (CFOs) and comptrollers if the
auditor’s responsibility was to detect ‘any or all fraud’, an overwhelming
majority, at 83.26%, said ‘no’, while 16.74% said ‘yes’.

To the question ‘do you think it is possible for auditors to detect any and
all corporate fraud (even if they think they are being intentionally misled by
management with respect to a company’s financial health), 83.26% of respondents
replied ‘no’ and 16.74%, ‘yes’.

Perhaps more troubling, 62% of respondents believed it would be possible to
intentionally misstate their financial statement to their auditor, against
37.10% who did not.

Furthermore, the eXtensible Business Reporting Language (XBRL) approved by
the US Securities and Exchange Commission last May is far from reality as almost
half of CFOs, at 47%, were not even aware of the new standard for tagged
business information and only 0.45% expected to file in XBRL format for the 2007
financial year.

Further reading:

XBRL gets US seal of approval

US-listeds herded onto XBRL

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