Are‌ ‌Auditors‌ ‌The‌ ‌Same‌ ‌as‌ ‌Fraud‌ ‌Examiners

Written by: Edith Timothea

Designed by: Fitra Fillian

The accounting profession is in charge of ensuring there is no misrepresentation in financial statements. To ensure accuracy is present, external auditors are involved to review the financial statements. Auditors also examine and evaluate the internal control of an organization that is run by the management to protect their business assets These auditors are usually licensed professionals familiar with the industry who are hired from an outside accounting firm. Meanwhile, the fraud examiners investigate and look for evidence whether a person or company has committed fraud. Auditors and fraud examiners can both work on financial data for their regular duties but their roles are different and it is important to know the differences.

The Roles of Auditor

Auditors determine the financial statements are accurate and without errors. Their main goal is to ensure all of the transactions and activities done by the company  are free from misrepresentation or errors. 

Auditors also have other duties, such as evaluating the anti-fraud and internal controls over financial statements then give their opinion about management’s assessment of internal controls. However, auditors will not look for fraud—their focus is on the internal controls and financial statement—but if there is a discrepancy upon review of any transactions or samples, they will notify management. Additionally, they should notify management of any red flags that may become evident.

The Roles of Fraud examiner

The basic goal for fraud examinations is to work out whether or not fraud occurred, and if so, who perpetrated it. A particular engagement may, however, have further goals, such as to establish and secure evidence to be used in a criminal or other disciplinary action or to provide proof to recover losses from an insurer (2017 Fraud Examiners Manual). 

Fraud examiners assess the weaknesses in internal controls and locate the perpetrator of the fraud. Their focus is not on a report for shareholders, but on reports of the findings, which can eventually become part of civil or criminal proceedings.

Conclusion of the difference between auditors and fraud examiners while doing their duties:

  • The auditor reviews financial information for accuracy and materiality, while the fraud examiner has a different focus: to determine the fraud and its extent and gather information for the next step.
  • Auditors perform yearly, while fraud examiners act when there is suspected fraud.