Audit and Assurance : Assignment
8 Pages2263 Words128 Views
Added on 2020-03-16
Audit and Assurance : Assignment
Added on 2020-03-16
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AUDIT & ASSURANCE
AuditIntroductionWith due course of time, major fraud hits the headlines as innumerable organizations just sit and watch stating that it cannot happen at their place. However, the reality is that fraud can take placeanywhere and at any time. The reason is that computer accounting has made the process of managing frauds more complicated that has further enhanced the compliance of additional processes. All these issues ultimately create a visibility gap that cannot be addressed by trust factors. As per surveys, technology systems are beneficial but weak and improper internal control systems have always enhanced the occurrence of frauds (Zissis & Lekkas, 2012). Thus, development of fraud detection and prevention software solutions can prove to be significantly important in this regard. This essay will successfully discuss various concerns that validate the above-mentioned facts so that a logical and informed argument can be framed. The findings fromthe guest lecturer of the New Zealand based company that is Vigilance is vividly discussed and adeep emphasis is done on the concept of fraud management softwares.2
AuditLiterature reviewBased on the report of KPMG, it has been witnessed that lack of proper internal control measureswithin the organizations is the major reason behind the creation of frauds. With the development of innovative technologies in the field of accounting and auditing, the processes have surely become productive in nature but nothing comes without a price. In simple words, these technologies have also played a key role in increasing the complications for fulfilling the required processes. In simple words, such complexities have resulted in the compliance of more processes that is not feasible to be followed by the operational staff. Similarly, such processes cannot easily align with the business growth as a whole because documentation and review of these cannot be done regularly (Blay et. al, 2011). These inefficacies owing to the prevalence of complications in the entire management process create a visibility loophole betwixt the chain of command in the company’s affairs. Besides, such visibility loophole plays a key role in enabling the executives to rely on trust but such reliance is not feasible because it is also a major factor in creating further complications for the future. Further, studies have also provided that organizations lose approximately seven percent of their annual turnover because of the prevalence of fraud within their framework. This clearly sheds light on the fact that development of fraud prevention softwares are the need of the hour so that such drastic scenarios can be avoided largely (Doz & Kosonen, 2010). A lack of proper and essential softwares led to immense issue whereby the organization suffered both in terms of money and operations. This is the sole reason why fraud high number of frauds was observed when there were no softwares. Despite such serious risk of fraud in business organizations, many still do not possess proper procedures and systems in place to detect, prevent, and react to fraud. Besides, many studies show that organizations that are able to reduce the impact of fraud within their framework are more likely to attain benefits from the same (Ruhnke & Schmidt, 2014). Such prevention cannot solely be undertaken through the development of modern accounting technologies like cloud accounting. This is because these processes have their own disadvantages as well. Therefore, in addition to the utilization of such systems, proper fraud detection software must also be in place so that fraud can be stopped through continuous assessment techniques. Fraud detection softwareis vital for the organization because there are innumerable complex transactions that are done in the normal course of business (Francen, 2014). Such transactions are vulnerable to threats and 3
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