A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements

Objective: Fraudulent financial reporting is a major concern of the audit profession. In this regard, auditors are responsible according to auditing standards. Given the importance of identification and assessment of the risk of fraud in an audit of financial statements and the importance of respons...

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Autores principales:	Ghasem Boluo, Farrokh Barzideh, Hamid Alahyari Abhari
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2020
Materias:	fraud risk factors fraud risk assessment auditing fuzzy delphi method structural equation modeling (sem) Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/49eeb7605da44182b504473b8e7c566d
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id	oai:doaj.org-article:49eeb7605da44182b504473b8e7c566d
record_format	dspace
institution	DOAJ
collection	DOAJ
language	FA
topic	fraud risk factors fraud risk assessment auditing fuzzy delphi method structural equation modeling (sem) Accounting. Bookkeeping HF5601-5689
spellingShingle	fraud risk factors fraud risk assessment auditing fuzzy delphi method structural equation modeling (sem) Accounting. Bookkeeping HF5601-5689 Ghasem Boluo Farrokh Barzideh Hamid Alahyari Abhari A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
description	Objective: Fraudulent financial reporting is a major concern of the audit profession. In this regard, auditors are responsible according to auditing standards. Given the importance of identification and assessment of the risk of fraud in an audit of financial statements and the importance of responses of auditors, the purpose of this study is to provide a model for identification and assessment of the risks of material misstatement due to fraud in an audit of financial statements. Methods: In order to achieve this goal, firstly, researches in this field were studied to identify the effective indicators on assessment of the risk of fraud and other effective indicators were extracted by interviewing experts. Experts' opinion on the extracted indicators was collected through a questionnaire and were agreed upon through using Fuzzy Delphi method and expert opinion poll. Subsequently, confirmatory factor analysis test was used to determine the factor load of each indicator of each component. The relationship between the influence of different indicators on assessment of the risk of fraud in the form of Structural Equation Modeling (SEM) was tested and the research model was presented. Results: The results of the study showed that 146 out of 162 indicators extracted from theoretical foundations and researches and interviews, in the form of 5 components, reached the Delphi group general consensus and the results of performing a confirmatory factor analysis showed 144 indicators were of sufficient importance. Conclusion: The components that influence the assessment of the risk of fraud in an audit of financial statements, importance respectively, are: the characteristics of the client, the characteristics of the audit firm, the characteristics of performing the audit, the environmental characteristics and the personal characteristics of the auditor. Of the 53 indicators approved in the component of client characteristics, five important indicators are: lack of sufficient managers experience; lack of fair dealing with staff; lack of appropriate work environment for employees; lack of job security; ignoring the need to monitor or reduce the risks associated with assets misappropriation. Of the 23 indicators approved in the component of audit firm characteristics, five important indicators are: having sufficient auditing tools; auditor access to databases; giving auditors reasonable rights and benefits; adequate investment in auditing; and fair dealing with Auditors. Of the 27 indicators approved in the component of the characteristics of performing the audit, five important indicators are: adjusting the audit plan and auditing tests in responses to fraud risk factors; adequate understanding of the client and its environment, including internal controls; appropriate allocation and oversight of the audit team; the discussion among audit team members; and auditor access to databases. Of the 19 indicators approved in the component of environmental characteristics, five important indicators are: lack of culture of accountability and answering; sophisticated rules and regulations; numerous laws and regulations; lack of independent oversight bodies; and inexpressive laws and regulations. Of the 22 indicators approved in the component of personal characteristics of the auditor, five important indicators are: Ability to properly understand evidence and identify evidence inconsistent with other evidence; knowledge and awareness of fraud; responsibility; confidence; ability to identification of intentional identified misstatements.
format	article
author	Ghasem Boluo Farrokh Barzideh Hamid Alahyari Abhari
author_facet	Ghasem Boluo Farrokh Barzideh Hamid Alahyari Abhari
author_sort	Ghasem Boluo
title	A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
title_short	A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
title_full	A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
title_fullStr	A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
title_full_unstemmed	A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements
title_sort	model for assessment of the risk of fraud in an audit of financial statements
publisher	Shahid Bahonar University of Kerman
publishDate	2020
url	https://doaj.org/article/49eeb7605da44182b504473b8e7c566d
work_keys_str_mv	AT ghasemboluo amodelforassessmentoftheriskoffraudinanauditoffinancialstatements AT farrokhbarzideh amodelforassessmentoftheriskoffraudinanauditoffinancialstatements AT hamidalahyariabhari amodelforassessmentoftheriskoffraudinanauditoffinancialstatements AT ghasemboluo modelforassessmentoftheriskoffraudinanauditoffinancialstatements AT farrokhbarzideh modelforassessmentoftheriskoffraudinanauditoffinancialstatements AT hamidalahyariabhari modelforassessmentoftheriskoffraudinanauditoffinancialstatements
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spelling	oai:doaj.org-article:49eeb7605da44182b504473b8e7c566d2021-11-04T19:56:32ZA Model for Assessment of the Risk of Fraud in an Audit of Financial Statements2008-89142476-292X10.22103/jak.2020.15880.3254https://doaj.org/article/49eeb7605da44182b504473b8e7c566d2020-12-01T00:00:00Zhttps://jak.uk.ac.ir/article_2755_6e9e4f5f7538804891f20e275ce08cb7.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XObjective: Fraudulent financial reporting is a major concern of the audit profession. In this regard, auditors are responsible according to auditing standards. Given the importance of identification and assessment of the risk of fraud in an audit of financial statements and the importance of responses of auditors, the purpose of this study is to provide a model for identification and assessment of the risks of material misstatement due to fraud in an audit of financial statements. Methods: In order to achieve this goal, firstly, researches in this field were studied to identify the effective indicators on assessment of the risk of fraud and other effective indicators were extracted by interviewing experts. Experts' opinion on the extracted indicators was collected through a questionnaire and were agreed upon through using Fuzzy Delphi method and expert opinion poll. Subsequently, confirmatory factor analysis test was used to determine the factor load of each indicator of each component. The relationship between the influence of different indicators on assessment of the risk of fraud in the form of Structural Equation Modeling (SEM) was tested and the research model was presented. Results: The results of the study showed that 146 out of 162 indicators extracted from theoretical foundations and researches and interviews, in the form of 5 components, reached the Delphi group general consensus and the results of performing a confirmatory factor analysis showed 144 indicators were of sufficient importance. Conclusion: The components that influence the assessment of the risk of fraud in an audit of financial statements, importance respectively, are: the characteristics of the client, the characteristics of the audit firm, the characteristics of performing the audit, the environmental characteristics and the personal characteristics of the auditor. Of the 53 indicators approved in the component of client characteristics, five important indicators are: lack of sufficient managers experience; lack of fair dealing with staff; lack of appropriate work environment for employees; lack of job security; ignoring the need to monitor or reduce the risks associated with assets misappropriation. Of the 23 indicators approved in the component of audit firm characteristics, five important indicators are: having sufficient auditing tools; auditor access to databases; giving auditors reasonable rights and benefits; adequate investment in auditing; and fair dealing with Auditors. Of the 27 indicators approved in the component of the characteristics of performing the audit, five important indicators are: adjusting the audit plan and auditing tests in responses to fraud risk factors; adequate understanding of the client and its environment, including internal controls; appropriate allocation and oversight of the audit team; the discussion among audit team members; and auditor access to databases. Of the 19 indicators approved in the component of environmental characteristics, five important indicators are: lack of culture of accountability and answering; sophisticated rules and regulations; numerous laws and regulations; lack of independent oversight bodies; and inexpressive laws and regulations. Of the 22 indicators approved in the component of personal characteristics of the auditor, five important indicators are: Ability to properly understand evidence and identify evidence inconsistent with other evidence; knowledge and awareness of fraud; responsibility; confidence; ability to identification of intentional identified misstatements.Ghasem BoluoFarrokh BarzidehHamid Alahyari AbhariShahid Bahonar University of Kermanarticlefraud risk factorsfraud risk assessmentauditingfuzzy delphi methodstructural equation modeling (sem)Accounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 11, Iss 4, Pp 25-45 (2020)

A Model for Assessment of the Risk of Fraud in an Audit of Financial Statements

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