Fraud Detection Proposed Model by Internal Auditors Based on International Standards on Auditing
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Aug 31, 2016
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Abstract
In the exercise of their duties, internal auditors are responsible for the detection of fraud, an aspect to
be taken into account both into planning and at the moment of carrying out their auditing work. Still, there are no rules or regulations guiding the internal auditor at the moment of performing these duties in a precise manner. It is precisely the lack of guidance on this matter which has led us to study the effect of the International Standards on Auditing (ISA), applied by external auditors, on internal auditing procedures. In this way, we designed an instrument to measure the variables affecting fraud detection using ISA 240, The auditor's responsibilities relating to fraud in an audit of financial statements. From this document, 96 statements related with global fraud risk indicators in financial statements and errors caused by embezzlement were used and subject to assessment by 617 internal auditors using a survey which evaluates their perception of fraud, taking into account the aforementioned statements. Using exploratory, and later confirmatory, factorial analysis (Structural Equations Model, SEM), we have scientific evidence to prove that by means of the assessment of merely 17 out of 96 of the variables previously defined in the ISA 240 document –and with a degree of certainty above 87%)– internal auditors should be able to minimize the probability of fraud in companies.
Keywords
Detección de fraudes, Normas Internacionales de Auditoría, análisis estadístico, auditoría externa frente a auditoría internae Detecção de fraude, Normas Internacionais de Auditoria, análise estatística, auditoria externa contra a auditoria internafraud detection, international standards on accounting, statistical analysis, external auditing compared to internal auditing
References
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American Institute of Certified Public Accountants, AICPA (2002). SAS 99, Consideration of Fraud in a Financial Statement Audit. Disponible en: https:// www.aicpa.org/Research/Standards/ AuditAttest/DownloadableDocuments/AU00316.pdf
Apostolou, Barbara; Hassell, John M.; Webber, Sally A. & Sumners, Glenn E. (2001). The Relative Importance of Management Fraud Risk Factors. Behavioral Research in Accounting, 13, 1-24.
Asare, Stephen K. & Wright, Arnold M. (2004). The Effectiveness of Alternative Risk Assessment and Program Planning Tools in a Fraud Setting. Contemporary Accounting Research, 21 (2), 325-352.
Association of Certified Fraud Examiners, ACFE (2010). Report to the Nations on Occupational Fraud and Abuse. Austin, Texas: Association of Certified Fraud Examiners. Disponible en: http://www.acfe. com/rttn-international.aspx
Association of Certified Fraud Examiners, ACFE (2014). Report to the Nations on Occupational Fraud and Abuse. 2014 Global Fraud Study. Austin, Texas: Association of Certified Fraud Examiners. Disponible en Association of Certified Fraud Examiners: http://www.acfe.com/rttn/docs/2014report-to-nations.pdf
Badillo-Ayala, Jorge (2008). Auditoría forense: más que una especialidad profesional una misión: prevenir y detectar el fraude financiero. Disponible en: https://na.theiia.org/ translations/PublicDocuments/ auditoría_ Forense_Una_Misi%C3%B3n_JBadillo_ Mayo08(14023).pdf
Batista-Foguet, Joan Manuel & Coenders-Gallart, Germà (2000). Modelo de ecuaciones estructurales: modelos para el análisis de relaciones causales. Madrid: La Muralla S.A.
Church, Bryan K.; McMillan, Jeffrey J. & Schneider, Arnold (2001). Factors Affecting Internal Auditors’ Consideration of Fraudulent Financial Reporting during Analytical Procedures. Auditing: A Journal of Practice & Theory, 20 (1), 65-80.
Coram, Paul; Ferguson, Colin & Moroney, Robyn (2008). Internal Audit, Alternative Internal Audit Structures and the Level of Misappropriation of Assets Fraud. Accounting and Finance, 48 (4), 543-559.
606 / vol. 16 / no. 42 / septiembre-diciembre 2015
DeZoort, Todd & Harrison, Paul (2008). An Evaluation of Internal Auditor Responsibility for Fraud Detection. Florida: The Institute of Internal Auditor.
Estados Unidos (2002). Ley Sarbanes-Oxley. Disponible en: http://www.soxlaw.com/
Farber, David B. (2005). Restoring Trust After Fraud: Does Corporate Governance Matter? The Accounting Review, 80 (2), 539-561.
García-Benau, María Antonia & Humphrey, Christopher (1995). La auditoría y el fraude: algunas consideraciones internacionales. Revista Española de Financiación y Contabilidad, REFC, 24 (84), 697-726. Disponible en: https://www.researchgate.net/ publication/28216537_La_auditoria_y_el_ fraude_Algunas_consideraciones_internacionales
García-Jiménez, Eduardo; Gil-Flores, Javier & Rodríguez-Gómez, Gregorio (2000). Análisis factorial. Colección Cuadernos de Estadística. Madrid: La Muralla S.A.
Gonzalvo, Enrique (2003). Una guía para prevenir el fraude. Buenos Aires: Instituto de Auditores Internos de Argentina, IAIA. Disponible en: http://www.iaia.org.ar/revistas/ normaria/Normaria06.pdf
Gurovich, Leopoldo Isaac (2006). Informe N° 14. Área auditoría: consideraciones del fraude y del error en una auditoría de estados contables. Rosario: Federación Argentina de Consejos Profesionales de Ciencias Económicas (FACPCE) & Centro de Estudios Científicos y Técnicos (CECyT). Disponible en: http://www.facpce.org. ar:8080/miniportal/archivos/informes_del_ cecyt/area_auditoria_informe_14.pdf
Hair, Joseph F.; Tatham, Ronald L.; Anderson, Rolph E. & Black, William C. (1998). Multivariate Data Analysis. Volume 5. Harlow, Essex: Prentice Hall.
Hunt, Shelby D. (1991). Modern Marketing Theory: Critical Issues in the Philosophy of Marketing Science. Cincinnati, Ohio: SouthWestern Publishing Co.
Institute of Internal Auditors, IIA (2013). Normas internacionales para el ejercicio profesional de la auditoría interna. Disponible en: https://na.theiia.org/ translations/PublicDocuments/IPPF%20 Standards%20Markup%20Changes%20 2013-01%20vs%202011-01%20Spanish.pdf
Institute of Internal Auditors, IIA; American Institute of Certified Public Accountants, AICPA & Association of Certified Fraud Examiners, ACFE (2008). Managing the Business Risk of Fraud: A Practical Guide. Disponible en: https://www.acfe.com/ uploadedFiles/ACFE_Website/Content/ documents/managing-business-risk.pdf
International Auditing and Assurance Standards Board, IAASB (2009). International Standard on Auditing (ISAs) 240: The Auditor's Responsibility to Consider Fraud and Error in an Audit of Financial Statements. International Auditing and Assurance Standards Board, IAASB & International Federation of Accounting Committee, IFAC.
Kaplan, Steven E.; Richmond-Pope, Kelly & Samuels, Janet A. (2011). An Examination of the Effect of Inquiry and Auditor Type on Reporting Intentions for Fraud. Auditing: A Journal of Practice & Theory, 30 (4), 29-49.modelo propuesto para la detección de fraudes / j. salas-ávila, n. reyes-maldonado / 607
Malcolm, Smith; Haji-Omar, Normah; Zulkarnain-Sayd-Idris, Syed Iskandar & Baharuddin, Ithnahaini (2005). Auditors' Perception of Fraud Risk Indicators: Malaysian Evidence. Managerial Auditing Journal, 20 (1), 73-85.
Moyes, Glen David (1991). An Analysis of the Effectiveness of Specific Auditing Techniques for Detecting Fraud as Perceived by Three Different Auditor Groups. Doctor of Business Administration Thesis. San Diego: United States International University.
Moyes, Glen David (2007). The Differences In Perceived Level of Fraud-Detecting Effectiveness of SAS No. 99 Red Flags between External and Internal Auditors. Journal of Business & Economics Research, JBER, 5 (6), 9-26. Disponible en: http:// www.cluteinstitute.com/ojs/index.php/ JBER/article/view/2551/2597
Moyes, Glen David; Lin, Ping; Landry, Raymond M. & Vicdan, Handan (2006). Internal Auditor's Perceptions of the Effectiveness of Red Flags to Detect Fraudulent Financial Reporting. Journal of Accounting, Ethics & Public Policy, 6 (1), 1-28. Disponible en: http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=961457
Owusu-Ansah, Stephen; Moyes, Glen David; Oyelere, Peter Babangida & Hay, David (2002). An Empirical Analysis of the Likelihood of Detecting Fraud in New Zealand. Managerial Auditing Journal, 17 (4), 192-204.
Ramos, Michael J. (2003). Auditor's Responsibility for Fraud Detection: SAS No. 99 Introduces a New Era in Auditors' Requirements. Journal of Accountancy,
195 (1), 1-9. Disponible en: http://www. journalofaccountancy.com/issues/2003/jan/ auditorsresponsibilityforfrauddetection.html
Ríos-Figueroa, Carmen (2013). Efecto del conocimiento cultural en la percepción de los auditores: controles internos y fraude. Revista Internacional Administración & Finanzas, 6 (2), 15-32. Disponible en: http:// papers.ssrn.com/sol3/papers.cfm?abstract_ id=2156409
Soberanis-Aguirre de Rueda, María de los Ángeles & Herrera-Soria, Francisco Ernesto (2013). La auditoría interna en la prevención y detección de fraudes. XXX Conferencia Interamericana de Contabilidad, Punta del Este, Uruguay, Colegio de Contadores, Economistas y Administradores del Uruguay, CCEAU. Disponible en: http:// www.cpcecba.org.ar/media/img/paginas/ La%20Auditor%C3%ADa%20Interna%20 En%20La%20Detecci%C3%B3n%20Y%20 Prevenci%C3%B3n%20De%20Fraudes.pdf
Tak, Isa; Morariu, Ana & Guney, Ayhan (2012). The Importance of the Financial Audit Perception in the Internal Control Structure to Prevent the Financial Crises: Evidence from Romania. Journal of WEI Business and Economics, 1 (1), 10-18. Disponible en: http://westeastinstitute. com/journals/wp-content/uploads/2013/02/ ZG12-134-Isa-tak-Morariu-Ana-and-AyhanGuney-Full-Paper-Ready.pdf
Villacorta-Hernández, Miguel Ángel (2014). Responsabilidad del auditor ante el fraude empresarial. Global Conference on Business and Finance Proceedings, The Institute for Business & Finance Research, IBFR, 9 (2),
608 / vol. 16 / no. 42 / septiembre-diciembre 2015
1828-1833. Disponible en: http://www. theibfr.com/ARCHIVE/ISSN-1941-9589V9-N2-2014.pdf, http://www.theibfr.com/ proceedings.htm
Whittington, O. Ray & Pany, Kurt (2005). Principios de auditoría. México: McGraw-Hill, Interamericana de México.
Wolfe, David T. & Hermanson, Dana R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. The CPA Journal, 38-42. Disponible en: http://wweb.uta.edu/faculty/ subraman/EMBA-FTW2009/Articles/ Fraud%20Diamond%20Four%20Elements. CPAJ2004.pdf
Zikmund, William G.; Babin, Barry J.; Carr, Jon C. & Griffin, Mitch (2000). Business Research Methods. Volume 6. San Diego, Cali
fornia: The Dryden Press, Harcourt Brace College Publishers.
American Institute of Certified Public Accountants, AICPA (2002). SAS 99, Consideration of Fraud in a Financial Statement Audit. Disponible en: https:// www.aicpa.org/Research/Standards/ AuditAttest/DownloadableDocuments/AU00316.pdf
Apostolou, Barbara; Hassell, John M.; Webber, Sally A. & Sumners, Glenn E. (2001). The Relative Importance of Management Fraud Risk Factors. Behavioral Research in Accounting, 13, 1-24.
Asare, Stephen K. & Wright, Arnold M. (2004). The Effectiveness of Alternative Risk Assessment and Program Planning Tools in a Fraud Setting. Contemporary Accounting Research, 21 (2), 325-352.
Association of Certified Fraud Examiners, ACFE (2010). Report to the Nations on Occupational Fraud and Abuse. Austin, Texas: Association of Certified Fraud Examiners. Disponible en: http://www.acfe. com/rttn-international.aspx
Association of Certified Fraud Examiners, ACFE (2014). Report to the Nations on Occupational Fraud and Abuse. 2014 Global Fraud Study. Austin, Texas: Association of Certified Fraud Examiners. Disponible en Association of Certified Fraud Examiners: http://www.acfe.com/rttn/docs/2014report-to-nations.pdf
Badillo-Ayala, Jorge (2008). Auditoría forense: más que una especialidad profesional una misión: prevenir y detectar el fraude financiero. Disponible en: https://na.theiia.org/ translations/PublicDocuments/ auditoría_ Forense_Una_Misi%C3%B3n_JBadillo_ Mayo08(14023).pdf
Batista-Foguet, Joan Manuel & Coenders-Gallart, Germà (2000). Modelo de ecuaciones estructurales: modelos para el análisis de relaciones causales. Madrid: La Muralla S.A.
Church, Bryan K.; McMillan, Jeffrey J. & Schneider, Arnold (2001). Factors Affecting Internal Auditors’ Consideration of Fraudulent Financial Reporting during Analytical Procedures. Auditing: A Journal of Practice & Theory, 20 (1), 65-80.
Coram, Paul; Ferguson, Colin & Moroney, Robyn (2008). Internal Audit, Alternative Internal Audit Structures and the Level of Misappropriation of Assets Fraud. Accounting and Finance, 48 (4), 543-559.
606 / vol. 16 / no. 42 / septiembre-diciembre 2015
DeZoort, Todd & Harrison, Paul (2008). An Evaluation of Internal Auditor Responsibility for Fraud Detection. Florida: The Institute of Internal Auditor.
Estados Unidos (2002). Ley Sarbanes-Oxley. Disponible en: http://www.soxlaw.com/
Farber, David B. (2005). Restoring Trust After Fraud: Does Corporate Governance Matter? The Accounting Review, 80 (2), 539-561.
García-Benau, María Antonia & Humphrey, Christopher (1995). La auditoría y el fraude: algunas consideraciones internacionales. Revista Española de Financiación y Contabilidad, REFC, 24 (84), 697-726. Disponible en: https://www.researchgate.net/ publication/28216537_La_auditoria_y_el_ fraude_Algunas_consideraciones_internacionales
García-Jiménez, Eduardo; Gil-Flores, Javier & Rodríguez-Gómez, Gregorio (2000). Análisis factorial. Colección Cuadernos de Estadística. Madrid: La Muralla S.A.
Gonzalvo, Enrique (2003). Una guía para prevenir el fraude. Buenos Aires: Instituto de Auditores Internos de Argentina, IAIA. Disponible en: http://www.iaia.org.ar/revistas/ normaria/Normaria06.pdf
Gurovich, Leopoldo Isaac (2006). Informe N° 14. Área auditoría: consideraciones del fraude y del error en una auditoría de estados contables. Rosario: Federación Argentina de Consejos Profesionales de Ciencias Económicas (FACPCE) & Centro de Estudios Científicos y Técnicos (CECyT). Disponible en: http://www.facpce.org. ar:8080/miniportal/archivos/informes_del_ cecyt/area_auditoria_informe_14.pdf
Hair, Joseph F.; Tatham, Ronald L.; Anderson, Rolph E. & Black, William C. (1998). Multivariate Data Analysis. Volume 5. Harlow, Essex: Prentice Hall.
Hunt, Shelby D. (1991). Modern Marketing Theory: Critical Issues in the Philosophy of Marketing Science. Cincinnati, Ohio: SouthWestern Publishing Co.
Institute of Internal Auditors, IIA (2013). Normas internacionales para el ejercicio profesional de la auditoría interna. Disponible en: https://na.theiia.org/ translations/PublicDocuments/IPPF%20 Standards%20Markup%20Changes%20 2013-01%20vs%202011-01%20Spanish.pdf
Institute of Internal Auditors, IIA; American Institute of Certified Public Accountants, AICPA & Association of Certified Fraud Examiners, ACFE (2008). Managing the Business Risk of Fraud: A Practical Guide. Disponible en: https://www.acfe.com/ uploadedFiles/ACFE_Website/Content/ documents/managing-business-risk.pdf
International Auditing and Assurance Standards Board, IAASB (2009). International Standard on Auditing (ISAs) 240: The Auditor's Responsibility to Consider Fraud and Error in an Audit of Financial Statements. International Auditing and Assurance Standards Board, IAASB & International Federation of Accounting Committee, IFAC.
Kaplan, Steven E.; Richmond-Pope, Kelly & Samuels, Janet A. (2011). An Examination of the Effect of Inquiry and Auditor Type on Reporting Intentions for Fraud. Auditing: A Journal of Practice & Theory, 30 (4), 29-49.modelo propuesto para la detección de fraudes / j. salas-ávila, n. reyes-maldonado / 607
Malcolm, Smith; Haji-Omar, Normah; Zulkarnain-Sayd-Idris, Syed Iskandar & Baharuddin, Ithnahaini (2005). Auditors' Perception of Fraud Risk Indicators: Malaysian Evidence. Managerial Auditing Journal, 20 (1), 73-85.
Moyes, Glen David (1991). An Analysis of the Effectiveness of Specific Auditing Techniques for Detecting Fraud as Perceived by Three Different Auditor Groups. Doctor of Business Administration Thesis. San Diego: United States International University.
Moyes, Glen David (2007). The Differences In Perceived Level of Fraud-Detecting Effectiveness of SAS No. 99 Red Flags between External and Internal Auditors. Journal of Business & Economics Research, JBER, 5 (6), 9-26. Disponible en: http:// www.cluteinstitute.com/ojs/index.php/ JBER/article/view/2551/2597
Moyes, Glen David; Lin, Ping; Landry, Raymond M. & Vicdan, Handan (2006). Internal Auditor's Perceptions of the Effectiveness of Red Flags to Detect Fraudulent Financial Reporting. Journal of Accounting, Ethics & Public Policy, 6 (1), 1-28. Disponible en: http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=961457
Owusu-Ansah, Stephen; Moyes, Glen David; Oyelere, Peter Babangida & Hay, David (2002). An Empirical Analysis of the Likelihood of Detecting Fraud in New Zealand. Managerial Auditing Journal, 17 (4), 192-204.
Ramos, Michael J. (2003). Auditor's Responsibility for Fraud Detection: SAS No. 99 Introduces a New Era in Auditors' Requirements. Journal of Accountancy,
195 (1), 1-9. Disponible en: http://www. journalofaccountancy.com/issues/2003/jan/ auditorsresponsibilityforfrauddetection.html
Ríos-Figueroa, Carmen (2013). Efecto del conocimiento cultural en la percepción de los auditores: controles internos y fraude. Revista Internacional Administración & Finanzas, 6 (2), 15-32. Disponible en: http:// papers.ssrn.com/sol3/papers.cfm?abstract_ id=2156409
Soberanis-Aguirre de Rueda, María de los Ángeles & Herrera-Soria, Francisco Ernesto (2013). La auditoría interna en la prevención y detección de fraudes. XXX Conferencia Interamericana de Contabilidad, Punta del Este, Uruguay, Colegio de Contadores, Economistas y Administradores del Uruguay, CCEAU. Disponible en: http:// www.cpcecba.org.ar/media/img/paginas/ La%20Auditor%C3%ADa%20Interna%20 En%20La%20Detecci%C3%B3n%20Y%20 Prevenci%C3%B3n%20De%20Fraudes.pdf
Tak, Isa; Morariu, Ana & Guney, Ayhan (2012). The Importance of the Financial Audit Perception in the Internal Control Structure to Prevent the Financial Crises: Evidence from Romania. Journal of WEI Business and Economics, 1 (1), 10-18. Disponible en: http://westeastinstitute. com/journals/wp-content/uploads/2013/02/ ZG12-134-Isa-tak-Morariu-Ana-and-AyhanGuney-Full-Paper-Ready.pdf
Villacorta-Hernández, Miguel Ángel (2014). Responsabilidad del auditor ante el fraude empresarial. Global Conference on Business and Finance Proceedings, The Institute for Business & Finance Research, IBFR, 9 (2),
608 / vol. 16 / no. 42 / septiembre-diciembre 2015
1828-1833. Disponible en: http://www. theibfr.com/ARCHIVE/ISSN-1941-9589V9-N2-2014.pdf, http://www.theibfr.com/ proceedings.htm
Whittington, O. Ray & Pany, Kurt (2005). Principios de auditoría. México: McGraw-Hill, Interamericana de México.
Wolfe, David T. & Hermanson, Dana R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. The CPA Journal, 38-42. Disponible en: http://wweb.uta.edu/faculty/ subraman/EMBA-FTW2009/Articles/ Fraud%20Diamond%20Four%20Elements. CPAJ2004.pdf
Zikmund, William G.; Babin, Barry J.; Carr, Jon C. & Griffin, Mitch (2000). Business Research Methods. Volume 6. San Diego, Cali
fornia: The Dryden Press, Harcourt Brace College Publishers.
How to Cite
Salas-Ávila, J. A., & Reyes-Maldonado, N. M. (2016). Fraud Detection Proposed Model by Internal Auditors Based on International Standards on Auditing. Cuadernos De Contabilidad, 16(42). https://doi.org/10.11144/Javeriana.cc16-42.mpdf
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