ICAI issues guide on identifying fraud in audits

The Institute of Chartered Accountants in Ireland (ICAI) has issued a new publication entitled "Fraud – Meeting the Challenge through External Audit".

The publication has been prepared by the Institute’s Auditing Standards Committee. It is to be issued to each member firm of the Institute.

The publication sets out a ten part plan to improve the capacity of the external audit to identify and address fraud in the audited entity.

The plan draws on the new International Standard on Auditing, number 240, which will apply to the audits of financial statements in the UK and the Republic of Ireland in respect of accounting periods commencing on or after December 2004.

Commenting on the publication ICAI President, Terence O’Rourke said: “Public expectation about what assurances can be provided by audit sometimes runs ahead of what is possible. We call that the ‘expectation gap’.

"Nonetheless, it is incumbent on us as auditors to develop the best possible techniques to identify fraud and malpractice in a company. This publication is part of our strategy to meet theses expectations.

"The issues identified focus around the importance of identification of the risk of fraud within a company and designing audit procedures to deal with these risks."