International Issue in Accounting and Audit

Introduction

The responsibilities of auditors have been a subject of renewed international interest in light of the spate of corporate fraud and entities collapses witnessed in the recent years. The external auditors play the instrumental role of independently verifying that the companies’ financial reports have a true reflection of the transactions, which transpired within the period under consideration. However, in an organization set up, the role of preparing the financial statements in accordance with the regulating standards, in a true and fair view and detecting and preventing fraud rests with the organization’s management. Different jurisdictions around the world places different responsibilities on the external auditor for detecting fraud, although they are mainly not held responsible for preventing errors and fraud, but they play positive role in curbing fraud through deterrence of its occurrence.

In line with this, this report seeks to evaluate the role of the external auditor with regard to preventing and detecting the financial fraud in the United States of America. The report commences by analyzing the role of the external auditor in the lens of the US financial reporting regulations. The report then assess the sufficiency of the external auditors requirement in USA with regard to fraud detection and prevention, before looking at the major fraud cases that have occurred in USA d have implications on the role of external auditor. After analyzing this, the report looks at some financial frauds that have occurred in other countries like United Kingdom (UK) and compares their implication and handling with that of the USA. The report ends with the evaluation of the potential impact of the international auditing standards on the external auditor and concludes by having a summary of the main ideas.

Role of the External Auditor Regarding Fraud Detection and Prevention in USA

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