An exploratory study of auditors’ responsibility for fraud detection in Barbados

Philmore Alleyne and Michael Howard

Managerial Auditing Journal, 2005, vol. 20, issue 3, 284-303

Abstract: Purpose - Recently, fraud has been brought to the forefront with the scandals of Enron and Worldcom. Fraudulent financial reporting and misappropriation of assets served to undermine investors’ confidence in audited financial statements. This study investigates how auditors and users perceive the auditors’ responsibility for uncovering fraud, the nature and extent of fraud in Barbados, and audit procedures utilised in Barbados since Enron. Design/methodology/approach - A total of 43 respondents (19 auditors and 24 users) were surveyed regarding their perceptions and experiences on fraud, using qualitative and quantitative approaches. Findings - Indicates that the expectation gap is wide, as auditors felt that the detection of fraud is management's responsibility, while users and management disagreed. Also finds that fraud is not a major issue in Barbados and that companies who have internal auditors, sound internal controls and effective audit committees are better equipped to deal with fraud prevention and detection. Research limitations/implications - The sample size is relatively small and it is not intended nor claimed that those interviewed comprise a representative sample. Practical implications - This research fills a void in research in this area in a small country like Barbados. These findings have important implications for users of Barbadian accounts, especially investors, auditors and regulators. Originality/value - This paper fulfils a resource need for academics and practitioners, and makes an interesting contribution to our understanding of fraud in Barbados.

Keywords: Fraud; Auditors; Barbados (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:eme:majpps:02686900510585618

DOI: 10.1108/02686900510585618

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