External Auditor's Attitude Towards Responsibility for Negligence in Detecting Fraud

	External Auditor's Attitude Towards Responsibility for Negligence in Detecting Fraud
Tikrit Journal For Administration & Economics Sciences
Article 1, Volume 9, Issue 29, 2013, Pages 207-230
Abstract
Abstract This study aims to determine the responsibility of the auditor in the detection of fraud in the implementation of audit engagement, and procedures that can be followed to avoid problems and the defense plan that can be taken by the auditor if he does not discover the fraud. This research addressed the subject of the definition , types of fraud, and the reasons that lead to commit fraud. It has been expressed by what is so-called Triangle of fraud, meaning that to commit fraud, there must be three factors: a motive, opportunity and justification. The auditor become exposed to great pressure by the users of financial statements as being responsible for detecting errors and fraud. In order to avoid such responsibility, he/ she should do some activities, such as holding brainstorming sessions, Skeptical Attitude, search for the risks of committing fraud, learn the art of listening to others, the duty to consider likelihood of fraud, and reporting irregularities and other measures. But despite all that, the auditor remains vulnerable to litigation and claim by the customer or by a third party as a result of lack of fraud detection. Thus, the auditor should follow a strategy or reaction to defend himself/herself against this litigation, including that engagement includes a condition not to provide misleading or incorrect statements, validation of the loss that occurs on the third party resulting from reliance on the auditor's report as well as to insist that the loss commensurate with the extent of damage. The auditor's defense against lawsuits filed must include doing necessary professional care properly. , there is no obligation in the contract, contribute to neglect, lack of a causal link. There are also other measures which help to avoid litigation problems like only dealing with customers who have honesty and integrity, using unpredictable auditing procedures from year to year and documenting work

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