Fraud... Can Audit Committees Really Make a Difference?
The AICPA held a conference on January 31, 2006, titled Fraud . . . Can Audit Committees Really Make A Difference?. The one-day event focused
on: (1) the audit committee's responsibilities under SOX; (2) internal controls and how they alone cannot prevent management fraud; (3) how to deter management override of an otherwise effective internal controls system; and (4) procedures to use once the Audit Committee detects management override.
Even if you missed the conference, you can still gain insight from experts on best practices Audit Committee members can utilize to effectively fulfill their management oversight responsibilities. Review key points and download session slides, author bios, and videos.
This document, written by the AICPA Antifraud Programs and Controls Task Force, offers assistance to audit committees in addressing the risk of fraud through management override of internal control over financial reporting.
Organized into three major components (Section A: Management Override and the Audit Committees Responsibilities; Section B: Actions to Address the Risk of Management Override of Internal Controls; Appendix: Suggested Audit Committee Procedures: Strengthening Knowledge of the Business and Related Financial Statement Risks), it includes guidance for audit committees on:
Maintaining an appropriate level of skepticism
Strengthening committee understanding of the business
Brainstorming to identify fraud risks
Using the code of conduct to assess financial reporting culture
Cultivating a vigorous whistleblower program
Developing a broad information and feedback network including communications with internal auditors, independent auditors, compensation committee, and key employees
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