Besvigelser: Herunder stillingtagen til EU-Kommissionens forslag

Cecilie Hestbeck Johansen

Student thesis: Master thesis


Statistics show that 37% of all companies have been victimized by economic crime, which is an increase of 3 percentage point since the survey from 2011. 22% of the economic crime represent accounting fraud and 69% of the crimes are asset misappropriation. There has been a lot of focus on the accounting profession ever since the financial crisis and the published Green Book from the European Commission, which consists of changes to the existing directive which also includes some new regulations, concerning only the companies of public interest. The main purpose of this thesis is to clarify the definition of the term economic crime according to ISA 240 and to look at the responsibilities of preventing fraud for both the accountant and the company’s management. This thesis is based on ISA 240 “the auditor’s responsibilities relation to fraud in an audit financial statement”. Which is found extremely pivotal and applicable as the standard contains appropriate guidelines on how the auditor must respond to fraudulent financial reporting. In this thesis it will be reviewed which possibilities the enterprises and accountants have for exploring fraudulent financial reporting. Based on this review I have drawn the conclusion that financial statement items containing elements of accounting estimates are generally at more risk of being subject to fraudulent financial reporting, as the estimates generally are at more risk of an biased managerial assessment. To prevent fraud, the enterprise can establish a reliable and strong control environment. In the thesis different key elements on how the enterprise can secure the risk of fraud have been illustrated. Despite the establishment of a reliable control environment, it is often not possible to avoid fraudulent financial reporting completely, as management because of its authorities is able to ignore the internal controls. In relation to the financial crisis and the introduction of the Green Book, the thesis will evaluate whether future initiatives will contribute positively to the identification and prevention of fraud. In the early days there was complete confidence to the auditor and his work, but with the corporate scandals the confidence was lost, and history shows that it is regained by increasing the regulation of the auditor. In continuation hereof the thesis clarifies how the identification and prevention of fraud can be improved by modifications to the present ISA 240 as well as other adjustments.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2014
Number of pages83