Fraudulent Financial Reporting

David Bæk Vejlgaard & Nicolaj Emil Jensen

Student thesis: Master thesis

Abstract

Within the last years fighting fraud has become increasingly important, 49 percent of companies in PWC Global Economic Crime and Fraud Survey 2018, have experienced fraud within the company within the last two years. Fraud have evolved a lot and so have the people committing frauds, they are continually trying to find new ways to commit and hide fraud. But the race is on and companies have increased the amount of surveillance and controls, that’s helping to catch the frauds. This development has and is continually being pressed by the public, who have become more judging and less overbearing of companies ignoring fraud. A firms annual report, can be very important to the public, investors and etc. Investors use the annual report as a sign, on how well the company is doing. Because of this the auditor’s role has special part to play, since they are the last line of defense against fraud. This is one of the reasons why auditors are representative of the public, and because auditors are what secures trust in the annual report, it is much more important that the authority of auditors, doesn’t get soiled by rotten eggs. Thus, we wanted to examine the responsibilities of auditors in relation to fraud further. We found that auditors don’t bear the responsibilities of fraud, rather that obligation lies with the management of the firm. However, auditors bear the responsibility of performing professional skepticism, in correlation to circumstances that indicate fraud. Auditors will because of this not be held accountable for fraud found in the company unless they have been deemed negligent. We use the case of auditing manipulation in Genan A/S as an example on where the legislation, and consequences of breaking those legislations, could be changed to improve the conditions which form the basis for the audit regarding fraud and accounting manipulation

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2019
Number of pages111