Audit regulators have given a wake-up call to auditing firms that inspectors will be looking for more effort in ferreting out fraud risks.
The Public Company Accounting Oversight Board issued a report last week that says audit-engagement teams typically don’t do enough investigating when they discover possible evidence of fraud, nor do they adequately document their work when they have identified a fraud risk. That often leaves senior members of the engagement team in the dark about whether fraud risks are present and how they may or may not have been investigated, the report says.
