 Fraud Triangle as an Audit ToolNamrata Sandhu and Shefali Saluja Management and Labour Studies, 2023, vol. 48, issue 3, 418-443 Abstract: The objective of this study is to assess the usefulness of the fraud triangle in fraud detection and to make use of the results to critically examine the Indian Standard on Auditing that describes the responsibilities of auditors related to frauds (SA 240). Based on content analysis and quantitative assessment of publicly documented evidence in the form of press articles covering 19 emblematic Indian cases of fraud that went public between 1992 and 2018, this study establishes the validity of the fraud triangle and recommends that auditors evaluate potential frauds based on the components of the fraud triangle. The study also identifies fraud risk factors not covered in SA 240 and suggests that these risk factors be added to SA 240 to aid the fraud detection efforts of auditors. Further, the behavioural nature of the fraud risk factors missing from SA 240 suggests that the behaviour of prospective fraud perpetrators has not received due consideration in SA 240. The value of this study lies in its ability to demonstrate the usefulness of the fraud triangle as an audit tool and underscore the room for improvement in the Indian auditing standard related to frauds (SA 240). Keywords: Fraud; fraud triangle; audit; auditing standard; auditor; fraud risk factor (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:manlab:v:48:y:2023:i:3:p:418-443 DOI: 10.1177/0258042X231160970 Access Statistics for this article More articles in Management and Labour Studies from XLRI Jamshedpur, School of Business Management & Human Resources |
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