[remote_phone]

Auditors do not look for fraud. Plain and simple. It has NEVER been their job. I have at least a dozen auditors/accountants as close friends. Talk to any auditor and that’s the first thing they will tell you. If they happen upon fraud they need to tell the authorities immediately but otherwise don’t expect auditors to be the ones who are also fraud detectors.

[ISL]

What is the point of an audit except to look for unexpected flows within the revenue streams of a company?

Fraud is among the most-egregious forms of bookkeeping errors.

[rwallace]

I am surprised! I always thought that was precisely their job. So if it's not, what is their job instead?

[howlgarnish]

Auditing is about legal compliance: it's an external verification that a company's books are drawn up according to prevailing requirements.

[rwallace]

So why exactly does anyone want that, if not as a subgoal of spotting fraud? (I mean, if the first link in the chain is "because that's what's necessary and sufficient to comply with the law" then why was the law written that way?)

[davidgay]

I would presume that the (not unreasonable) assumption is that "verification that a company's books are drawn up according to prevailing requirements." makes it harder to hide fraud.

[howlgarnish]

Because governments want to make sure companies are declaring all their earnings, so they can be taxed.

[IkmoIkmo]

Well I did just talk to the auditor of my company (100m ebitda, not massive but not small), last week about their questions regarding fraud and it seems you're entirely wrong...