Audit Manager Mock Interview
Master 23 Audit Manager interview questions covering risk assessment, team leadership, and regulatory compliance.
Question 18 of 23
In an audit, who is primarily responsible for the prevention and detection of fraud?
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Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.
According to auditing pronouncement AU-C Section 240, a company's management is primarily responsible for detecting fraud and preventing it in the first place, by having effective internal controls. An auditor must conduct an audit in accordance with GAAS (generally accepted auditing standards). However, given the limitations of an audit, there is an inherent risk that not all material misstatements will be detected.
Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.
"Ultimately, it is a company's management that is responsible for preventing and detecting fraud within their organization. They can achieve this by implementing effective internal controls and committing to a culture of honest and ethical behavior. As auditors, there is a chance we would catch fraud and misstatements during our audit. However, there is an inherent risk that an audit won't catch all material misstatements and fraud."
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