You are here:

Auditing/Audit danger?

Advertisement

Expert: Don Sadler - 6/15/2008


Question
Dear Don,
I heard that the works of an auditor comes with danger including being threaten and even murdered to prevent the auditor from discovering any financial fraud. What is your experience in this? Currently is there any solution for this problem? Is there any hope at all to enforce justice?

Answer
As an auditor you often have an adversarial with the people you are auditing. In some organizations, their performance appraisals or bonuses are affected by audit outcome.  Given this, it is understandable that they may be resentful, afraid, or even hostile regarding your audit effort.  It is not uncommon for the ‘auditees’ to challenge your credentials or try to intimidate you during the audit.  They will likely contest each finding and try to discredit your work.

However, I have never experienced any threats and I have not heard of any other auditors being threatened. The oddest reaction I have had is for auditees to come on to me saying they will do ‘anything’ to get a good audit report.  Yes, you understand correctly as they repeat and emphasize ‘anything’.  Obviously, this would be a breach of ethics as well as illegal.

Remember, you are simply comparing ‘what is’ to ‘what should be’ so you are simply the scorekeeper.  It is always a good technique to explain at the beginning of the audit all the benefits that can come from an audit.

Auditing

All Answers

Answers by Expert:

Ask Experts

Volunteer

Don Sadler

Expertise

I can answer regarding Internal Auditing - especially operational audits, audit management, and how to revitalize a dysfunctional audit department. Also give advice to "auditees" on how to deal with auditors.

I DO NOT ANSWER HOMEWORK OR CLASS PROJECT QUESTIONS. For those answers, I suggest you scan previously asked questions and search on your favorite search engine.

I ALSO DO NOT ANSWER TAX QUESTIONS AS THIS IS NOT WITHIN MY EXPERTISE. NOTE: I am not an accounting expert although i will try to help if I can... ask at your own risk.

Experience

I have worked in the public and private business management arena with experience in OMB, Resource Management, Internal Auditing and consulting. I am a former President of the Inland Empire Chapter Institute of Internal Auditors, previously held Director positions in the Orange County Information Systems Audit and Control Association and the Northern Telecom International User's Association. I am a Certified Fraud Examiner and a Certified Information Systems Auditor.

Organizations
Institute of Internal Auditors, Association of Certified Fraud Examiners, and Information Systems Audit and Control Association (ISACA)

Education/Credentials
MBA, CISA, CFE

Founder and Principal of Applied INTEGRITY Management Consulting Group

©2012 About.com, a part of The New York Times Company. All rights reserved.