An Examination of Actual Fraud Cases With a Focus on the Auditor’s Responsibility

Claus Holm (), Lars Bo Langsted and Jesper Seehausen
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Claus Holm: Department of Business Studies, Aarhus School of Business, Postal: The Aarhus School of Business, Fuglesangs Allé 4, 8210 Aarhus V, Denmark, http://www.asb.dk/staff/bs/hoc.aspx?page=%7B803EFF10-69F7-4C0F-AEE3-F7F410E4B6F2%7D
Lars Bo Langsted: Department of Business Studies, Postal: Aalborg University, Aalborg, Denmark
Jesper Seehausen: Department of Business Studies, Postal: Aalborg University, Aalborg, Denmark

No A-2007-05, Accounting Research Center Working Papers from University of Aarhus, Aarhus School of Business, Department of Business Studies

Abstract: The purpose of this paper is to contribute to an understanding of the intricate relationship between

audit regulation and developments in audit practice in relation to the fraud issue. The extent and exact nature of the responsibilities of the auditor to detect fraud in relation to audit engagements has been widely discussed over the years. In this paper we classify actual cases, where the responsibilities of auditors have been established by the court system and/or by the auditors own professional organizations in Denmark. The dataset includes all publicized cases raised against Danish auditors within the time period 1909-2006. The information provided in the cases provides a basis for identifying the actual responsibilities pertaining to fraud during the audit. The overall finding of the historical analysis is that the responsibilities of the auditor in relation to fraud should be interpreted not as a group of its own, but in line with the development of what constitutes a good audit in general.

Keywords: Fraud; auditor responsibility; intentional misstatements; misappropriation; fraudulent reporting; embezzlement (search for similar items in EconPapers)
Pages: 68 pages
Date: 2007-05-18
New Economics Papers: this item is included in nep-acc, nep-his and nep-reg
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