The Center for Audit Quality (CAQ) on Wednesday published a report that outlines the organization’s long-term agenda to combat financial reporting fraud.
The report, Deterring and Detecting Financial Reporting Fraud—A Platform for Action, identifies three areas of focus: a strong, highly ethical tone at the top that permeates the corporate culture; skepticism—a questioning mindset that strengthens professional objectivity on the part of financial reporting supply chain participants; and strong communication among supply chain participants.
To support these focus areas, the CAQ announced partnerships to collaborate on four initial work streams with three organizations representing participants in the financial reporting supply chain: Financial Executives International (FEI); The Institute of Internal Auditors (IIA); and the National Association of Corporate Directors (NACD).
“The report will serve as a platform for future activities in the next three to five years,” said CAQ Executive Director Cindy Fornelli on a conference call with reporters. “Our next step will be to work with FEI, the IIA and the NACD to share resources and prioritize our activities in these areas.”
Fornelli said initial efforts will focus on:
- Advancing the understanding of conditions that contribute to fraud;
- Developing techniques to enhance the application of skepticism;
- Moderating the risks of focusing only on short-term results; and
- Leveraging the role of technology in deterring and detecting financial reporting fraud.
The CAQ is affiliated with the AICPA.
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