IDEAS home Printed from https://ideas.repec.org/a/cbu/jrnlec/y2023v6p373-385.html
   My bibliography  Save this article

The Importance Of The Financial Audit In Preventing Accounting Errors And Fraud

Author

Listed:
  • IAMANDACHE (FLOREA) LAURA ANDREEA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • HORAICU ADRIANA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • STOICA RALUCA ANDREEA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • IACOB (ZAVINCU) ADRIANA

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

  • ZUCA MARILENA

    (ROMANO-AMERICANA UNIVERSITY, BUCHAREST, ROMANIA)

  • MUNTEANU VICTOR

    (VALAHIA UNIVERSITY OF TARGOVISTE, ROMANIA)

Abstract

In the audit of financial statements, the main objective of the auditor is to express an opinion on the accuracy of the reported information, in all significant aspects, in relation to the applicable accounting framework. Although international auditing standards state that auditors are not required to detect financial fraud in audited companies, they must ensure during their engagement that the risk of fraud will not affect the audit opinion. To detect the risk of fraud and reports of accounting manipulation, auditors can use several signal indicators. Practice and literature support that the use of indices to detect accounting manipulation can be achieved through various linear scoring functions including the Beneish Model (1999). In Romania, the problem of assessing the risk of audit fraud has not been adequately addressed, until now. The purpose of this scientific approach is to prevent, analyze and evaluate the risk of fraud, based on the estimated score function and the defined classification interval.

Suggested Citation

  • Iamandache (Florea) Laura Andreea & Horaicu Adriana & Stoica Raluca Andreea & Iacob (Zavincu) Adriana & Zuca Marilena & Munteanu Victor, 2023. "The Importance Of The Financial Audit In Preventing Accounting Errors And Fraud," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 373-385, December.
    • Handle: RePEc:cbu:jrnlec:y:2023:v:6:p:373-385
    as

    Download full text from publisher

    File URL: https://www.utgjiu.ro/revista/ec/pdf/2023-06/39_iamandache.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hironori Fukukawa & Theodore J. Mock & Arnold Wright, 2011. "Client Risk Factors and Audit Resource Allocation Decisions," Abacus, Accounting Foundation, University of Sydney, vol. 47(1), pages 85-108, March.
    2. Valentin BURCA & Dorel MATEȘ & Oana BOGDAN, 2021. "Exemplifying the Effect of Big Bath Accounting in the Pandemic," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 2(2), pages 3-16, February.
    3. Santanu Mitra & Donald R. Deis & Mahmud Hossain, 2009. "The association between audit fees and reported earnings quality in pre‐ and post‐Sarbanes‐Oxley regimes," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 8(3), pages 232-252, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohamed Gaber & Edward J. Lusk, 2019. "A Vetting Protocol for the Analytical Procedures Platform for the AP-Phase of PCAOB Audits," Accounting and Finance Research, Sciedu Press, vol. 8(4), pages 1-43, November.
    2. Hrazdil, Karel & Simunic, Dan A. & Spector, Stephen & Suwanyangyuan, Nattavut, 2023. "Top executive gender diversity and financial reporting quality," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(2).
    3. Sarowar Hossain & Jenny Jing Wang, 2023. "Abnormal audit fees and audit quality: Australian evidence," Australian Journal of Management, Australian School of Business, vol. 48(3), pages 596-624, August.
    4. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    5. Wu, Bin & Wu, Yaqian & Zhang, Min & Li, Jiyuan, 2024. "Opening the black box of human resource allocations in audit firms: The assignment of audit partners to audit engagements," The British Accounting Review, Elsevier, vol. 56(2).
    6. Jaehong Lee & Suyon Kim & Eunsoo Kim, 2022. "Environmental Responsibility, Social Responsibility, and Governance from the Perspective of Auditors," IJERPH, MDPI, vol. 19(19), pages 1-14, September.
    7. Li, Xuelian & Liu, Ming, 2024. "Abnormal audit fees and financial reporting quality: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    8. Suyon Kim, 2021. "Does Engagement Partners’ Effort Affect Audit Quality? With a Focus on the Effects of Internal Control System," Risks, MDPI, vol. 9(12), pages 1-17, December.
    9. Michael De Martinis & Hironori Fukukawa & Theodore J. Mock, 2011. "Exploring the role of country and client type on the auditor's client risk assessments and audit planning decisions," Managerial Auditing Journal, Emerald Group Publishing, vol. 26(7), pages 543-565, July.
    10. Haapamäki, Elina & Sihvonen, Jukka, 2019. "Research on International Standards on Auditing: Literature synthesis and opportunities for future research," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 35(C), pages 37-56.
    11. Sarah Bonner & Tracie Majors & Stacey Ritter, 2018. "Prepopulating Audit Workpapers with Prior Year Assessments: Default Option Effects on Risk Rating Accuracy," Journal of Accounting Research, Wiley Blackwell, vol. 56(5), pages 1453-1481, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbu:jrnlec:y:2023:v:6:p:373-385. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ecobici Nicolae (email available below). General contact details of provider: https://edirc.repec.org/data/fetgjro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.