Elyaa Audit and Consulting Managing Partner, Khalid Marhoon (KM) was one of the keynote speakers at the recently-concluded Arab Gulf Forum for Accountants and Auditors held at The Grove Hotel, Kingdom of Bahrain from 14 to 15 of November 2018. KM discussed the ways and the best practices to prevent fraud and corruption in the organization which is also related to objectives and requirements of the International Standard on Auditing (ISA) 240 or also known as “The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements.”
During the forum, KM specifically pointed out that “We can’t separate fraud and corruption from the general and regulatory environment of the organization and the primary responsibility for detecting fraud and corruption rests with both those charged with governance and its management”. Accordingly, he underscores the importance of how management, with an effective oversight of those charged with governance, should place a strong emphasis on fraud prevention. This involves establishing an internal audit function and the existence and enforcement of a written code of conduct to create a culture of honesty and ethical behavior within the organization. KM also explains the auditor’s responsibilities in compliance with ISA 240, stating that having the expertise in the review, evaluation and design of controls, auditors play a vital role to ensure that senior management is aware of the risk and materiality of fraud. However, at the end, internal controls alone are not sufficient, the senior management and employees’ attitudes must still come together to create a fraud resistant corporate culture.