'Professional scepticism' needed to fight fraud
The ICAEW has warned that the accountancy profession must continually evaluate its effectiveness in dealing with the threat of fraud.
The institute issued this warning as it welcomed publication of the International Audit and Assurance Standards Board’s proposals for a new international auditing standard on fraud.
Andrew Ratcliffe, chairman of the ICAEW’s Audit and Assurance Faculty, said: ‘Firms need to promote and reinforce professional scepticism, through training, encouraging good communication in the firm and between audit and client staff, and audit procedures that are based on an active consideration of the exposure of individual clients to the risk of fraud from any source.’
ICAEW said the new proposals on fraud would mean increased emphasis on the risk management of fraud, and specific audit procedures to address that risk.