Fraud has always been an issue worldwide. Denmark has experienced fraud in the public sector during the past decade even though auditors have been auditing their annual reports. There is a common expectation that auditors will find fraud when inspecting their reports and books.
Big fraud cases really influence society. People tend to lose confidence in the government and the elected people making decisions on behalf of the democracy.
This paper seeks to investigate the matter of fraud in specific areas within the Danish public sector. The paper is centred around the question: Who has the responsibility for fraud detection and -prevention? Furthermore, what is the auditor’s role in fraud detection and -prevention?
This master thesis approaches the academic field of auditing with the hermeneutic scientific method. Sources will therefore include both qualitative interviews and quantitative analysis. To understand the dynamics of auditing processes in the public sector, interviews with three current auditing experts have been conducted.
Based on current regulations, guidelines, fraud methods, the triangle of fraud and empirically data, auditors’ work has been analysed to understand the following; Where are the biggest risks, how do auditors act on that risk, what could the auditor have done differently and did the auditor act professional and follow the regulation for auditors. The main thing for auditors is to make sure the internal controls works, because a healthy environment of controls can limit the possibility of fraud.
The paper found that auditors tend to focus on operational auditing, as the biggest identified risk, because of the political risk involved when dealing with the state.
The auditors’ impact on preventing fraud highly depend on how the management implement the recommended internal controls. Auditors do have the option to go beyond the regulations of auditing to maximise fraud prevention. However, auditors’ responsibility in fraud detection is kind of small. Whistle blower tools are usually better for getting eyes on the problem – then the auditor is responsible for investigating the problem.
|Uddannelser||Cand.merc.aud Regnskab og Revision, (Kandidatuddannelse) Afsluttende afhandling|
|Vejledere||Kim Klarskov Jeppesen|