PREVENTION AND DETECTION OF FRAUD BY AUDITORS (EDUCATION PROJECT TOPICS AND MATERIALS)
CHAPTER ONE
INTRODUCTION
- Background of the Study
Fraud as “the action or an instance of deceiving somebody in order to make money or obtain goods illegally.
Fraud is a deliberate distortion and misrepresentation of fact in preparations of financial information, for the purpose of personal benefit or gain.
The International Auditing Guideline (IAG) defines fraud as a particular types of irregularity, this refers to irregularities involving the use of decent to obtain illegal or unjust advantage and may involve the following: manipulation, falsification, or alternation surprising or moiling transaction without substance, international and deceitful, which ever perspective fraud is looked at, an intentional distortion of financial statement, the misappropriation of asset, whether or not accompanied by distortion of financial statement. This issue of fraud has becomes a cankerworm that issue has eastern deep into the fabric of many corporate bodies in recent times. As a result, more time is being spent on board meeting in an attempt to find solution to the persistent fraudulent practices among management and non-management staffs.
Section 334 of the companies and allied matter acts (CAMA) 1990 states that in the case of every company, the directors shall in respect of every company prepare financial statement for the year (in form of annual reports and accounts) financial statement are means of communicating economic measurement obligations and information about the resources and performance of the reporting entity or enterprise those having reasonable right to such information i.e. Inventors, lenders, supplier, trade creditors, customers, banks, government, employees insurance companies etc.
Moreover, for the users as stated to have confidence in the report and also according to section 375 of CAMA 1990 which states that “each company shall appoint an auditor at each annual general meeting (AGM) to audit the financial statement of the company” the financial statement are being audited by such appointed auditors who act from the conclusion of the (AGM). In which they were appointed to the conclusion of the next AGM.