Auditors play important role in responding to fraud risk

The Center for Audit Quality and the Anti-Fraud Collaboration released a new publication on the role of the auditor in assessing and responding to fraud risk.

The online publication includes insights into practices, tools and considerations that can help auditors enhance their professional skepticism and overall approach to dealing with the risks of material misstatement resulting from fraud during an audit.  

"Auditors should continually strive to enhance their professional skepticism to effectively assess and respond to fraud risks, including considering when it may be important to elevate the basic level of skepticism that is applied throughout the process of any audit and being cognizant of biases that can impede professional skepticism," said the report.

Courtesy of the Center for Audit Quality

The report pointed out that the mitigation of fraud risk is most effective when all participants in the financial reporting ecosystem fulfill their roles in deterring and detecting fraud. Auditors, although they're often the last line of defense due to the scope and timing of their engagements, are among the many stakeholders whose influence and responsibilities have a significant impact on fraud deterrence and detection.

In addition to the CAQ, the Anti-Fraud Collaboration includes several other organizations: the Institute of Internal Auditors, Financial Executives International, the National Association of Corporate Directors and the Association of Certified Fraud Examiners. ACFE recently hosted a conference in New York and published a new report, the 2024 Compensation Guide for Anti-Fraud Professionals. It discusses the salary and benefit differences for anti-fraud professionals in relation to factors such as gender, age, experience, region and more.

According to the 2024 guide, the median compensation for female anti-fraud professionals surveyed was $102,000, compared to $108,000 for males. This $6,000 pay difference is much smaller than the pay difference noted in the 2014 guide ($13,500).

Gender diversification in the anti-fraud profession is increasing. Females made up 42% of survey responses in the 2024 report, compared to 35% 10 years ago in the 2014 report.

The highest median compensations were for CFEs in the United States ($120,000) and Australia ($102,704). The CFE premium (the compensation percentage difference between CFEs and non-CFEs) observed through survey results has increased 7% in the last decade.

One of the panels at the ACFE conference focused on the role of whistleblowers in uncovering fraud. Darin Ohland, senior vice president of demand generation and marketing operations at Navex, pointed out that whistleblowing reports are at an all-time high, up about 7% over last year, according to the company's whistleblowing and incident management benchmark report, and that trend holds true across industries of all sizes. "Whistleblowing is taking on additional strength as we go forward," he added.