Auditors get fraud guidance
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Your support makes all the difference.DETAILS of how auditors of financial sector businesses should go about reporting fraud to regulators, as required under new legislation, are set out in a statement of auditing standards published today, writes Roger Trapp.
The Auditing Practices Board's SAS 620 is a response to the 1992 Bingham report on the collapse of Bank of Credit and Commerce International. It is designed to provide a realistic framework for auditors, who now have a duty, as well as a right, to report fraud in banks, building societies and other finance businesses.
Bill Morrison, who retires as chairman of the APB at the end of this month, said: 'It clarifies and strengthens the auditors' ability to act in the public interest.'
The new obligation comes into effect for banks, building societies, investment businesses and friendly societies on 1 May. Insurance companies will not be included until July.
Many in the accounting profession and outside are sceptical about the effect of the new regulations. In particular, they point out that auditors still do not need to go in search of fraud, but only have to report it if they discover it in the course of their normal work.
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