With the large scandals involving misrepresentations of financial records recently, such as Enron, there is a need for investigations beyond the accounting auditor capabilities. A look at the different qualifications of a forensic accountant or more specifically a fraud auditor will show that this position would fill those needs. This paper will look at what a fraud auditor does and how it is different than what a regular auditor does. It will also look at some of the qualifications needed to become a fraud auditor.
Many would think an auditor and a fraud auditor were basically the same thing. A look at what each position does will show they are not. An auditor of financial record is looking to see if the company's financial records they are auditing have been prepared according to GAAP (general accepted accounting practices). While do so an auditor is not very likely to uncover fraud.
A fraud auditor's, on the other hand, main purpose is to look for signs of fraudulent activities. Usually a fraud auditor is asked to perform an audit after there has been some suspicious activities uncovered where as an audit might be done because of certain questionable activities it is usually done on a periodic basis regardless of any circumstances. What is a fraud auditor looking for exactly?
The fraud auditor is looking for the unusual as opposed to the usual. The cash accounts are an area which fraud is usually found. When employees are involved in fraud a fraud auditor can sometimes tell which employees are involves. The following types of accounts are typical fraud targets:
- Payable, payroll, benefits, and expense accounts- these are typical targets of lower-level employees
- Profits, deferred expenses, salaries, revenue, inventory - these are in the typical targets of higher-level employees (...