Financial Statement Fraud

5177 words 21 pages
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Financial Statement Fraud

ACCT 710: Assignment 6-2
Shannon Baxley
David Welch
September 24, 2011

Table of Contents
Abstract………………………………………………………………………………………3
Introduction…………………………………………………………………………………..3
Literature Reviews……………………………………………………………………………5
Conclusion…………………………………………………………………………………..16
References…………………………………………………………………………………...18

Abstract
This paper describes financial statement fraud (FSF) and how it may occur within companies. The reason of this study was to research FSF detection and prevention. Research was also done to determine any influences that SAS (Statement on Auditing Standards) No. 82 and SAS No. 99 had on audit programs and the analysis from external auditors. Thirteen scholarly journals were …show more content…

59). This standard included two core components.
First, the SAS required that the auditor must specifically assess the risk of the material misstatement due to fraud and should consider that assessment in designing the audit procedures to be performed. Second, in planning the audit, the auditor should document in the working papers evidence of the performance of the assessment of the risk of material misstatement due to fraud. (Mock & Turner, 2005, p. 60)
An auditor must be willing to guarantee that all financial statements do not have any misinformation. It does not matter if the misinformation is made by error or fraud. RQ1: How does SAS No. 82 and No. 99 affect audit programs? RQ2: What are some effective ways to prevent and detect financial statement fraud?
Literature Reviews
The title of study #1 is Fraud Risk and Audit Planning. “This study presents descriptive evidence on fraud risk factors in a sample of audit clients, and the relationship of those factors to fraud risk assessments and audit tests directed at controlling the risk of fraud” (Graham & Bedard, 2003, p. 55). Four interesting results were found. 1. Most clients have one or more factors indicative to increased fraud risk 2. Only a weak association of the number of fraud risk factors identified with the level of fraud risk assessed. 3. Auditors initially plan to address fraud

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