The role of the auditor in fraud risk management
Auditors are not really responsible for uncovering incidents of fraud, but somehow the impression is that the people in high positions in a company expect this of them. So when fraudulent activities are discovered through other sources, people wonder why the auditors were not onto it in the first place.
This is known as the expectation gap and the Centre for Audit Quality. The true role of an auditor, as defined by them is to examine the areas of the company which are the most vulnerable to suspicious activity. Because not every transaction goes through examination, there is always the chance that breaches in conduct and activity may be overlooked, even though the purpose of auditing is to seek them out.
Most companies worth their salt expect auditors to act in a dual role; balancing books as well as seeking out instances of misconduct. And in reality it is a harder task than it seems on the surface. Those auditors who have a background in economic and criminal investigation definitely have the upper hand in these situations. A lot of companies hire consultants with this profile to look into activities before anything goes out of hand. And a lot of companies have in-house auditor for this role.
Something that companies need to understand is that it is a lot of responsibility on a single person. They are much better off if they have processes in place for regulating activities that could be later supervised by the auditor when needed. The role of a traditional auditor is to assess the dealings of the company so that they can come up with reasonable doubt that fraudulent activities are inherent in the company. Netrika Singapore conducts fraud risk management in Singapore and is the go to solution for many big names stationed there.