Under generally accepted auditing standards, audit engagement teams must hold a fraud brainstorming session at the beginning of the audit. This session, led by the partner in charge of the audit, is designed to provide a time for the audit team to consider how the company could commit fraud. Further, the brainstorming meeting is used to set a tone of professional skepticism in the audit. Often, a fraud specialist attends the meeting to provide insight into other frauds committed by similar companies or industries and help identify the client's risk factors.
This guide discusses fraud and provides general guidance to help internal auditors comply with professional standards. Because fraud negatively impacts organizations in many ways — financially, reputational, and through psychological and social implications — it is important for organizations to have a strong fraud program that includes awareness, prevention, and detection programs, as well as a fraud risk assessment process to identify risks within the organization. To help organizations and internal auditors combat fraud, the guide discusses:
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