External Audit with a View to Detecting Financial Fraud

Abstract

Recently, the problem of financial fraud and its adverse effects on the quality of information disclosed and on the financial system in general has gained increasing attention from the media, the general public and regulators. Thus, the detection of financial fraud remains essential for the stability and continuity of companies. The role of the external auditor in the detection of financial fraud has been widely demonstrated in theoretical and empirical research. The purpose of this paper is to emphasize the responsibility of auditors in detecting and preventing fraud and the effectiveness of current audit procedures. Through a review of the literature, we have revealed the important role of external auditors in the detection and prevention of financial fraud. We have further explored the main models of financial fraud detection most used in previous studies.