The Inside Story
The changing role of internal audit in dealing with financial fraud
Across the globe, the economic downturn has brought a number of high profile frauds to the surface and in doing so has created a heightened awareness of fraud risk. Senior executives worldwide are increasingly focused on how their companies might be vulnerable to fraud and whether or not they mitigate sufficiently the risks of financial loss and reputational damage. In November 2010, Deloitte UK issued the results of an Internal Audit Fraud Survey that highlighted a disconnect between perception and reality in how companies are mitigating fraud risk. Although focused on UK companies, the survey’s findings may be relevant and insightful to similarly-sized companies worldwide.
In the survey of 75 heads of internal audit at businesses with average revenue of £500 million, 63 percent of respondents stated that their vulnerability to fraud had increased in the past 18 months, yet over 50 percent did not consider their internal audit staffing levels to be adequate to cover such risk. Furthermore, the survey highlighted the disparity between approach and levels of appropriate engagement and delivery, with 23 percent saying that economic uncertainty had not generated board level discussions on introducing or enhancing fraud risk monitoring.
Learn more about how UK companies are being impacted by fraud and explore how respondents see internal audit’s role/focus changing over the next 12 months by downloading the survey report above.
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