A fraud auditor prevents and detects fraudulent activities, developing standardized procedures for accounting and internal accounting. They investigate complaints, assemble a team of accountants, and liaise with law enforcement. A degree in accounting or mathematics is required, and certification may be necessary.
A fraud auditor is responsible for preventing and detecting various types of fraudulent activities. Typically, these individuals are employed by regulatory agencies, and most people working in these jobs have a background in finance or accounting. Like most regulators, an auditor is responsible for protecting the interests of consumers, commercial entities, government organizations and other institutions from the actions of unethical individuals.
To prevent fraud from occurring, the auditor may be tasked with developing standardized procedures for accounting and internal accounting. Organizations operating in certain industries or geographic regions are responsible for complying with these audit procedures. In some cases, these entities are required to hire external auditors to conduct regular accounting reviews. To ensure that procedures are being followed properly, the fraud auditor may make routine visits to these entities. Typically, an auditor has the authority to perform an impromptu audit of any aspect of an entity’s financial operations at any time.
Despite safeguards such as standardized accounting procedures being implemented, many cases involving sophisticated fraud operations go unnoticed for long periods of time. Many of these situations come to light as a result of the actions of whistleblowers. Consequently, many regulatory agencies create fraud hotlines or websites where individuals can file reports of suspected fraud. The auditor should investigate these complaints and conduct interviews with whistleblowers. The auditor must determine whether the allegations are frivolous or whether a full investigation is required.
During an audit or investigation, the fraud auditor assembles a team of accountants and assigns certain responsibilities to each of these individuals. Accountants review financial reports, bank statements, securities transactions and other types of documents that may include evidence of fraud. In addition, the fraud auditor liaises with law enforcement or other government agents responsible for questioning individuals who are believed to be complicit in fraud activity. The auditor collects information from interrogators and accountants and is responsible for determining whether fraud has occurred. Some fraudsters carry out operations involving many different entities. In this case, the auditor must alert other agents to investigate the accounts of entities that may have been impacted by a specific case of fraud.
In most cases, a fraud auditor must have completed an undergraduate degree in accounting, mathematics or a related topic. Laws in many countries require auditors to be certified accountants. In that case, a fraud auditor may have to pass regulatory examination before commencing work. Some employers prefer to hire auditors with previous experience working in specific industries, such as financial services or securities, as these individuals are familiar with the accounting practices of those companies.
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