The Third Edition of this successful text includes extensive changes, based on feedback from students and lecturers. There is a discussion of auditing and the law beyond the issue of third-party liability; and more coverage of recent developments in audit methodologies and techniques. New chapters include a survey of developments in audit automation, a discussion of the nature and development of the audit market, both in the United Kingdom and the European Union, and an assessment of the impact on auditing of the Cadbury Report on corporate governance, with particular attention to the role of audit committees. Each chapter includes questions for discussion.

Auditors' Responsibilities with Respect to Corporate Fraud – A Controversial Issue

Auditors' Responsibilities with Respect to Corporate Fraud – A Controversial Issue

Auditors' responsibilities with respect to corporate fraud – A controversial issue


In recent years corporate fraud has cost British businesses many millions of pounds: between 1989 and 1994 reported fraud amounted to £2.2 billion (KPMG, 1995) and it is estimated that reported fraud represents less than 10 per cent of total frauds (Financial Times, 1993, p. 8). It is evident that corporate fraud is a serious problem. Such fraud, especially that committed by senior executives and directors, usually comes to light when companies fail unexpectedly. When such failures occur, invariably the question asked is, ‘Where were the auditors?’

The role of external auditors in detecting and reporting corporate fraud is a highly controversial issue. Not only ...

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