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  • Writer's pictureLloydette Bai-Marrow


The president of the German Regulator BaFin has described the Wirecard scandal as a “complete disaster” and said “a whole range of private and public entities including my own have not been effective enough...”

In a training session delivered to a large group of auditors on detecting and investigating fraud, the first question I asked of the group was ‘ Is it the responsibility of auditors to detect fraud?’

There was a mixed and nuanced response.

Here are the 4 key considerations that I identified are:

1. SCEPTICISM - auditors should have a very healthy dose of scepticism about the information being provided by the company and not accepting it at face value;

2. POSSIBILITY- auditors should always be alive to the possibility that fraud has occurred or is occurring;

3. PAST EXPERIENCES- not being over reliant on past experiences with clients especially where there is long-term relationship; and

4. MINDSET- concluding with the need for a change in mindset when undertaking an audit.

In some jurisdictions, there is a rotation cycle for auditors on a yearly or biennal basis. Is it time for this to become widely accepted practice for auditors?

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