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To examine whether planning‐stage fraud risk assessments and audit experience affect the level of professional skepticism displayed by auditors during fieldwork.

The paper presents an experiment using professional auditors.

Overall, auditors predisposed to low fraud risk assessments were less skeptical than those with no knowledge of fraud risk (control group). Also, as expected, auditors in the control group were less skeptical than those predisposed to moderate/high fraud risk assessments. Staff auditors were more skeptical than seniors. Senior auditors showed no differences in skepticism between the control group and high fraud risk assessment group.

Professional skepticism in this study is measured as the auditors’ assessment of client truthfulness. There is reasonable disagreement on the exact meaning of professional skepticism and some readers’ interpretation of the term may be different from the authors' own.

The results suggest a need for audit firms to use ongoing training with regard to professional skepticism and the requirements of SAS No. 99, especially since skepticism appears to decline with increasing audit experience.

The study contributes to auditing literature in the areas of professional skepticism and fraud risk assessment. The overall experience result supports previous studies, but additional insight is gained as to differences in the experience/skepticism relationship at different levels of planning‐stage fraud risk.

Both the international and US auditing Standards provide guidance to the auditor in searching for material misstatements caused by errors and fraud. Auditors, especially those with clients interested in cross‐border securities markets, should comprehend the similarities and differences in the requirements found in the Standards in these significant audit areas. A comparison of the international Standard for error and fraud to the two US Standards for these topics discloses numerous similarities and a few differences. The findings are reassuring to auditors serving clients with cross‐border interests. Whether the auditor is utilizing the international or the US guidance, comparable audit work in searching for misstatements arising from errors and fraud is being performed.

The purpose of this study is to examine the risks of the metaverse ecosystem. This study provides an overview of the metaverse and its evolution and discusses the various fraud risks it poses for organizations (including boards of directors, forensic accountants, auditors and accountants). Given the advantages of the metaverse and the growing interest it is attracting from organizations, this paper sheds light on the importance of mitigating its risks.

Based on a systematic review of the literature on the metaverse and analysis of the fraud triangle, this study examines the different fraud risks it poses. More specifically, this study analyzes 21 articles on the metaverse published between 2021 and 2022 and attempts to answer the following research questions: What are the risks inherent in the metaverse? What are the fraud risks associated with it? What are the opportunities and pressures it brings? What is the rationalization underlying its use? This study conducts the analysis on two levels, that of the individual (user) and that of the organization. This paper summarizes the findings of publications on the metaverse in 2021 and 2022 to discover its various definitions and the opportunities and risks it represents.

This paper offers an insightful discussion of the advantages and risks the metaverse can bring. Because this analysis shows that any organization could be vulnerable to metaverse risks, this study provides organizations with strategies to deter, detect and prevent fraud and reputational risks. Regulatory bodies, financial authorities, board of directors and fraud investigators should all consider these risks before investing in the metaverse.

This paper adds new insights to the scarce research on the metaverse and cybersecurity by exploring the opportunities and risks it presents. It has several implications for organizations, boards of directors, management and regulatory authorities.

This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest new directions for future research.

The paper is based on a comprehensive general literature review using multiple search engines and databases.

This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud and detect fraud, particularly corporate fraud, insider fraud and asset diversion. Some companies use corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including board leadership and the role of ethics; (b) board characteristics, composition and structure; ownership structure; accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top.

To the best of the author’s knowledge, this is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers and academics alike.

The purpose of this paper is to examine the relation between internal audit function (IAF) characteristics and organizational variables and IAF’s self-investigation about fraud and irregularities (SIFI) in the French context.

This paper uses the responses of 96 chief audit executives (CAEs) to a global survey of the internal auditing profession carried out by the Institute of Internal Auditors Research Foundation (IIARF) in 2010. A logistic regression model is used to determine factors influencing IAF’s SIFI.

The authors’ findings reveal that IAF’s SIFI is positively correlated to independence and objectivity, the number of activities performed by the function, adoption of a systematic approach to evaluate the effectiveness of risk management and the size of the company.

This study examines the factors associated only to IAF’s investigation rather than assessment of the risk of fraud. It remains for future research to analyze determinants those related to internal auditors’ approaches when they evaluate the risk of fraud.

The findings have implications for CAEs who wish to improve the IAF’s ability to investigate fraud.

Even if the IIA has stipulated since 2009 that internal auditors must have knowledge to evaluate the risk of fraud, no disclosure requirement exists, in France, for IAF or its charter. The areas of research related to internal audit behavior in relation to fraud concern fraud risk investigation of financial fraud and management/employee misconduct.

The purpose of this study is to extend existing theory by developing a contingency theory for the public sector and to provide a landscape for local government to deal with white-collar crime. In recent years, the theme of risk management and internal controls, which is popular in the industry and private sector, has been mirrored by public sector organisations. Of course, it is to improve fraud risk control systems. We have to accept that public sector organisations have a growing need to control the (fraud) risks in a rapidly changing economic environment. Within this situation an effective internal control is becoming strategically important in many organisations, as it is proving to be a cost-efficient way to manage these risks in everyday operations. Here, the authors conducted a case study on the risk management control system at an Indonesian local government.

This study uses mixed methods, integrating quantitative and qualitative data – in-depth interviews and questionnaires were required to address the social phenomenon being investigated.

This study found that the structure of the control system fits a generic model, in which control systems are fundamental factors to all departments. It shows that control systems can support managers to align employee capabilities, activities and performance with the organisation’s goals and missions. In addition, the authors could identify, risk assessment and monitoring activities are effective measures of controlling organisation’s activities, and potentially could diagnose potential (fraud) risks, deterring to the achievement of organisational aims. Ideally, those aspects should be performed on a continuous basis if organisations want to prevent the spread of numerous potential menaces. In other words, if an organisation fails to carry out risk assessment correctly, it will result in unidentified possibility of fraud risks. The more explicit the risk assessment, the more effective the detection of fraud.

It can be alternative to consider Committee of Sponsoring Organizations of the Treadway Commission’s internal control as fraud mitigation in local government.

This study offers new directive discussion about internal controls as notion of fraud mitigation.

The purpose of this paper is to test the association between national culture dimensions and exposure to fraud with a view to drawing implications for understanding fraud risk.

The study is based on a sample of 66 countries. Regression analysis is conducted using Hofstede’s national culture dimensions as independent variables and fraud risk as a dependent variable. Transparency International’s corruption index was used as a proxy for fraud risk.

Results suggest high fraud risk exposure in countries with high power distance and those having limited long-term orientations.

The study informs deeper understanding of fraud risk through analysis of fraud risk in a culturally relative sense.

This is the first study (known to the author) to draw the implications of national culture for understanding fraud risk.

The high occurrence of procurement fraud requires the management of an enterprise, the risk manager of the enterprise and the internal auditor to address procurement fraud risks effectively within the enterprise risk management concept. The purpose of the article is to explain a procurement fraud risk management process which will serve as a comprehensive framework for enterprise risk managers and for internal auditors to limit the enterprise’s exposure to procurement fraud as far as possible. The study by Venter (2005) on which the article is based proposes a procurement fraud risk matrix which can be used to manage fraud risks within the procurement function efficiently. This matrix is based on the Committee of Supporting Organizations of the Treadway Commission’s (COSO’s) Enterprise Risk Management ‐Integrated Framework which is specifically applied to address the procurement fraud risk problem.

The current study examines the effect of fraud training on auditors' ability to identify fraud risk factors. This is important because most auditors have little or no direct experience with fraud; thus, research that investigates the potential effect of indirect experience through training is vitally important to fraud detection and audit quality. A total of 369 experienced auditors completed a complex audit simulation task that involved 15 seeded fraud risk red flags. A total of 143 auditors participated in a 30-minute training session focused specifically on fraud risk, while the remaining 226 auditors learned about general internal control risk during this time block. The results indicate that auditors with fraud training identified significantly more red flags and obtained greater knowledge about fraud risk than auditors who did not receive the training. Considering that the fraud training consumed only 30 minutes out of a 64-hour training session, the findings suggest that even modest exposure to fraud training is quite effective.

Commentators express concern that when auditors investigate for but fail to detect fraud, jurors might effectively penalize the auditors for having investigated for the fraud (AICPA, 2004; Coffee, 2004; Golden, Skalak, & Clayton, 2006). Consistent with these concerns, Reffett (2010) finds that, in a between-participants setting, evaluators in cases of undetected fraud are more likely to hold auditors liable for damages when the auditors identified the perpetrated fraud as a fraud risk and then investigated for the fraud, relative to when the auditors did neither. What remains unclear, however, is the extent to which identifying versus investigating fraud risks increases evaluators’ between-participants assessments of auditor liability. That is, when auditors investigate for, but fail to detect fraud, is the increase in evaluators’ liability assessments due to the fact that the auditors identified (i.e., were aware of) the fraud risk but did not detect the fraud, or that the auditors unsuccessfully investigated for the fraud (or both)? This study addresses these questions by reporting evidence that both identifying and investigating fraud risks can each, in isolation, increase evaluators’ perceptions of auditor negligence. The processes by which identifying and investigating fraud risks increase evaluators’ negligence verdicts, however, appear to differ.