When fraud is discovered within a business, the initial response is "How could that have happened?" And if audited financial statements were issued the question asked is, "Why didn’t the accountants have a clue?" These two questions raise the question of whose responsibility it is to prevent and detect fraud. The cost of fraud to businesses today is mounting, as is the level of concern among professionals.

Fraud, according to Webster’s New World Dictionary, is the "intentional deception to cause a person to give up property or some lawful right." The Association of Fraud Examiners’(1999) Report to the Nation on Occupational Fraud and Abuse further defines occupational fraud and abuse as "the use of one’s occupation for personal enrichment through the deliberate ... Showed first 120 words of 1904 Size (words) ...

... Continuing with another 115 out of 1904 Size (words) ...accountants, they should ensure that they have a thorough understanding of their clients' businesses as a basis for assessing the risk of material misstatement in the financial statements arising from fraud. The importance of professional skepticism in the conduct of audits must be reinforced in SAS 110 itself. Other Auditing Standards, especially those dealing with control systems and audit risk assessments, audit evidence, and quality control, can be reviewed and appropriately strengthened. Further, it is needed to reduce the risks arising on audit changeovers, if an entity's directors are suspected of being engaged in fraudulent activity, they may initiate a change in accountants to reduce the likelihood of detection.

ReferenceAmerican Institute of Certified Public Accountants. ...Essay still continues 100 more words...