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The Importance Of The Financial Audit In Preventing Accounting Errors And Fraud

Author

Listed:
  • IAMANDACHE (FLOREA) LAURA ANDREEA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • HORAICU ADRIANA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • STOICA RALUCA ANDREEA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • IACOB (ZAVINCU) ADRIANA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • ZUCA MARILENA

    (ROMANO-AMERICANA UNIVERSITY, BUCHAREST, ROMANIA)

  • MUNTEANU VICTOR

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

Abstract

In the audit of financial statements, the main objective of the auditor is to express an opinion on the accuracy of the reported information, in all significant aspects, in relation to the applicable accounting framework. Although international auditing standards state that auditors are not required to detect financial fraud in audited companies, they must ensure during their engagement that the risk of fraud will not affect the audit opinion. To detect the risk of fraud and reports of accounting manipulation, auditors can use several signal indicators. Practice and literature support that the use of indices to detect accounting manipulation can be achieved through various linear scoring functions including the Beneish Model (1999). In Romania, the problem of assessing the risk of audit fraud has not been adequately addressed, until now. The purpose of this scientific approach is to prevent, analyze and evaluate the risk of fraud, based on the estimated score function and the defined classification interval.

Suggested Citation

  • Iamandache (Florea) Laura Andreea & Horaicu Adriana & Stoica Raluca Andreea & Iacob (Zavincu) Adriana & Zuca Marilena & Munteanu Victor, 2023. "The Importance Of The Financial Audit In Preventing Accounting Errors And Fraud," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 373-385, December.
    • Handle: RePEc:cbu:jrnlec:y:2023:v:6:p:373-385
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    References listed on IDEAS

    as
    1. Hironori Fukukawa & Theodore J. Mock & Arnold Wright, 2011. "Client Risk Factors and Audit Resource Allocation Decisions," Abacus, Accounting Foundation, University of Sydney, vol. 47(1), pages 85-108, March.
    2. Valentin BURCA & Dorel MATEȘ & Oana BOGDAN, 2021. "Exemplifying the Effect of Big Bath Accounting in the Pandemic," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 2(2), pages 3-16, February.
    3. Santanu Mitra & Donald R. Deis & Mahmud Hossain, 2009. "The association between audit fees and reported earnings quality in pre‐ and post‐Sarbanes‐Oxley regimes," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 8(3), pages 232-252, August.
    Full references (including those not matched with items on IDEAS)

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