Auditor's Responsibility in Detecting Fraud

Employee and Management Fraud
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Institutional Affiliation
Employee and Management Fraud
Management fraud mainly involves senior leadership's intentional misrepresentation of the company's financial statements, inappropriate use of firm resources, or theft. Management fraud is perpetrated by people entrusted with governance roles, including an entity's control, direction, and supervision. Employee fraud entails a non-senior staff theft or inappropriate utilization of the firm's resources (Gottlieb, 2021). Employee fraud constitutes an ongoing, varied, and widespread issue that comes in diverse scales for all types of firms.
The auditor's responsibility in detecting fraud includes appropriately pointing out, evaluating, and responding to risks with professional skepticism and due care as stipulated by auditing standards. The financial statements auditor is tasked with planning and assessing to derive reasonable assurance concerning the soundness of the annual report. This implies that the auditor should derive a valid guarantee that the fraudulent schemes that materially misstate the firm's financial statements are identified. It is explicitly a role associated with detection. Accordingly, the au...