Role of auditors in the fight against fraud and corruption

Abstract

Based on the analysis of domestic practice, legal requirements, international standards of audit and acts of international organizations, the paper considers the problem of determining the role of auditors in the fight against the fraud and corruption. It is shown that the spread of the shadow economy and corruption significantly contributes to the growth of fraud, which negatively affects the audit activity and doesn't allow properly to adhere to the principles of independence and professional skepticism. Legislation and other regulations, that regulate the audit, need to be improved in order to properly defining the powers of auditors to fight against fraud and corruption. There is a need to introduce legal measures for auditors in cases where they detect fraud and corruption. The paper substantiates that the role of auditors in fight against the fraud and corruption can't be limited to the issue of their responsibility for detecting and evaluating such offenses. This problem has a much broader aspect and should include determining the social role of audit according to the society requirements and the professional capabilities of audit, taking into account the realities of today. This approach requires a thorough scientific analysis of the practical activities of auditors, the requirements of international instruments, current legislation, international auditing standards, as well as foreign experience. The analysis of scientific works shows that Ukrainian scientists insufficiently pay attention to the problems of auditors 'responsibility, especially which concern the issues of auditors' responsibility for detecting fraud and corruption. Basically, such issues are covered in general terms in textbooks and manuals and exclusively in terms of fraud, by commenting on International Standards of Audit without analyzing the practice. The existing jurisprudence of lawsuits, which are related to bringing auditors to justice for improper audits of financial statements, shows the lack of sustainable and scientifically sound approaches in the activity of regulatory authorities. Acts of international organizations and their implementation in practice, taking into account foreign experience, require proper implementation of this issue in the legislation of Ukraine.