The COVID-19 crisis has also increased the pressure
on companies. This has created new opportunities to commit fraud making
companies more vulnerable to corporate failure.
This publication, with its counterpart on going concern,
presents recommendations to strengthen the financial reporting
ecosystem. It takes another look into all key players’ role (including
auditors, companies’ boards and management, legislators, standard
setters and regulators) who must take a coordinated approach to achieve
tangible results in tackling fraud. With this aim we propose the
following recommendations:
- require companies to have and publicly report on a fraud risk management system
- pay specific attention to senior management fraud
- mandate an audit committee in all public interest entities
- make early warning mechanisms for auditors effective
- clarify auditing standards for a common understanding of the auditor’s role
- improve auditors’ access to knowledge and awareness about fraud
- auditors to clearly communicate their work and conclusions about fraud
We also invite relevant parties to explore how to use technology and
forensic experts in the most effective way within financial statements
audits.
We call for a joint effort of key parties to strengthen the
ecosystem. To this end, we ask you to send your thoughts and opinions on
our recommendations to harun@accountancyeurope.eu by 30 April 2021.