Independent audit and detect fraud - Essay Example

Independent Audit and Fraud Detection Independent audits are considered to be very useful and productive means to sort out all kinds of monetary vulnerabilities and frauds in a company. The primary task of the auditor is to look out for the inconsistencies and redundancies in the financial depiction of the company whether it is in the form of financial statements, income statements or monthly budgeting reports. Many a times, an independent audit fails to detect an internal fraud taking place and the paramount reason behind this is the fact that whenever an internal fraud takes place, the companies personnel ensure that it should be done in such a way that no outside or third party can detect it.

All the financial statements will be made in such a way that no statements will show any kind of inconsistency.In order to avoid frauds in a company, the internal control is of pronounced importance; otherwise no independent auditing firm or company will be able to track the frauds taking place inside any company. The internal control system is designed to keep track of the daily transactions of the company. The internal control systems not only contribute to checking the mathematical accuracy but also play part in rectifying the sources of data i.e. reporting systems (Trenerry, 1999).

The audit company and controlling system hierarchical leadership will also ensure that they put absolutely honest and hardworking auditors on the job otherwise many a times it happens that the auditors make internal deals with the employees of the addressed company and all the fraud tracking process comes to no use. ReferencesTrenerry, Alan R. Principles of Internal Control. Sydney, N.S.W: UNSW Press, 1999. Print.