Audit Expectations Gap
A single fraud loop-hole in an audit program calls into question the entire audit, whether or not a fraud occurred in that area.
"Users…expect auditors to search for and detect material misstatements, whether intentional or unintentional, and to prevent the issuance of misleading financial statements."
- Treadway Commission (1987)
"The public has always expected auditors to detect all financial statement fraud."
- Albrecht and Willingham (1993)
“auditors should recognize that detection of fraud is clearly an important objective of an audit. That has been true for over 60 years, but the literature of the profession had not forthrightly acknowledged that objective”
- Chief Auditor Douglas Carmichael,
Wall Street Journal, December 2003
