Based on the five components of an internal control system critically discuss what auditors could do to reduce the risk of fraud associated with deficiencies in their client’s internal control system.

Auditing

Assignment Task

You should produce a report covering parts A and B below. Exclude executive summary but in-text citations should be provided throughout the report.

Part A
Research into any high-profile corporate fraud case for which the amount involved exceeds £249
million (either caused by fraudulent financial reporting or misappropriation) and briefly discuss the role played by external auditors in the scandal. You must also identify the audit approach and/or
procedures used by the auditors prior to the fraudulent activity being exposed and lessons learnt
from such a scandal.

Part B
ISA 315 states that auditors need to understand their clients’ internal controls to be able to assess
the risk of material misstatement. Based on the five components of an internal control system
critically discuss what auditors could do to reduce the risk of fraud associated with deficiencies in
their client’s internal control system. A report with all the requirement listed below (maximum 1,500 words).