ARI invited Mr Saidfuddin, a Rasch Model expert to facilitate us with the research analysis of one of ARI research projects titled " A Survey on the Importance and Usage of Financial Statement Fraud Risk Red Flags by Malaysian Auditors". The study explores the application of the International Standard onAuditing 240 (ISA240) -
The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statement.
ISA 240 distinguishes fraud from error and describes the two types of fraud that are relevant to auditor - misstatements resulting from misappropriation of assets and misstatements resulting from fraudulent financial reporting. ARI received responses from three groups of suditors: external auditors, internal auditors and government auditors. One of the most interesting finding implicates that auditors play a very important role in preventing and detecting financial statement fraud. If the ISA 240 standard is being followed and adhered to very strictly, auditors may be able to mitigate such fraud at an astonishing rate of 84%....
ISA 240 distinguishes fraud from error and describes the two types of fraud that are relevant to auditor - misstatements resulting from misappropriation of assets and misstatements resulting from fraudulent financial reporting. ARI received responses from three groups of suditors: external auditors, internal auditors and government auditors. One of the most interesting finding implicates that auditors play a very important role in preventing and detecting financial statement fraud. If the ISA 240 standard is being followed and adhered to very strictly, auditors may be able to mitigate such fraud at an astonishing rate of 84%....
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