Chapter 2

Professional Standards

Every professional football team uses a playbook filled with intricately designed plays made up of X's and O's with arrows and such. No matter how refined or how numerous the plays in the book, it is the execution of them that determines a team's success. As unbelievable as it may first sound, the same can be said of fraud auditing. Without standards, the playbook, as it were, directed at fraud, causes successful results to be happenstance, and who wants to watch a team constantly calling an audible anyway? The standards may seem too broad for practical implementation. How can every possible situation be taken into account? However, like our plays, there needs to be room to adjust to the distinctiveness of the situation, and the tools provided by these standards allow for successful outcomes if executed properly.

The accounting scandals of the past few decades, as well as the recent economic downturn, have left a cloud over the auditing profession. It became apparent that the traditional standards of control testing and the overview of financial statements were not effective in detecting fraud. As a result, some old audit standards were revised and new ones were created. These “playbooks” offer the auditor guidelines, tools, and a solid basis for devising “a game plan” for addressing the risk of fraud.

Overview

Like a professional football team's game plan, whereby a playbook is revised to match a certain opponent, the focus of this chapter's discussion ...

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