... statements are materially misstated due to fraud. Via a survey of practicing auditors, we find that auditors rely heavily on prior-year balances and relations within the client’s financial data as benchmarks when developing expectations. Even though auditing standards describe additional benchmarks, which...

...Joseph F. Brazel; Christine Gimbar; Tammie J. Schaefer ABSTRACT This study explores two potential safeguards against liability when auditors exercise professional skepticism, but do not detect a fraud: (1) a firm policy requiring a specific level of professional skepticism in high-risk audit areas...

...Lori L. Solsma; Joyce Njoroge; Patrick H. Heaston ABSTRACT This case involves cash theft at the City of Casey, a small town in Iowa. To avoid detection in an impending audit, the city clerk set the administrative offices on fire. The State Auditor's Office performed an investigation and discovered...