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A fraud auditor is responsible for preventing and detecting various types of fraudulent activity. Typically, these individuals are employed by regulatory agencies and most people working in these jobs have a background in finance or accounting. As with most regulatory agents, an auditor is responsible for protecting the interests of consumers, business entities, government organizations and other institutions from the actions of unethical individuals.
In order to prevent fraud occurring, an auditor may be tasked with developing standardized procedures for internal accounting and bookkeeping. Organizations that operate within certain industries or geographic regions are responsible for complying with these auditing procedures. In some instances, these entities are required to hire external auditors to conduct regular accounting reviews. To ensure that procedures are being properly followed, the fraud auditor may make routine visits to these entities. Typically, an auditor has the authority to conduct an impromptu audit on any aspect of an entity’s financial operations at any time.
Despite safeguards such as standardized accounting procedures being implemented, many instances involving sophisticated fraud operations go undetected for lengthy periods of time. Many of these situations come to light as a result of the actions of whistleblowers. Consequently, many regulatory agencies set up fraud hotlines or websites through which individuals can file reports about suspected fraud. An auditor must investigate such complaints and conduct interviews with the whistleblowers. The auditor must determine whether the allegations are frivolous, or whether a full investigation is warranted.
During an audit or investigation, the fraud auditor assembles a team of accountants and assigns certain responsibilities to each of these individuals. The accountants review financial reports, bank statements, securities transactions and other types of documents that may include evidence of fraud. Additionally, the fraud auditor liaises with the police force or other government agents who are responsible for interrogating individuals who are believed to be complicit in the fraud activity. The auditor gathers information from both the interrogators and the accountants and is ultimately responsible for determining whether any fraud has occurred. Some fraudsters conduct operations that involve many different entities, in which case the auditor must alert other agents to investigate the accounts of entities that may have been impacted by a particular fraud case.
In most instances, a fraud auditor must have completed an undergraduate degree in accounting, mathematics or a related topic. Laws in many countries require auditors to be certified accountants in which case a fraud auditor may have to pass regulatory exam before beginning work. Some employers prefer to hire auditors who have prior experience working within particular industries such as the financial services or securities industries since these individuals are familiar with the accounting practices of these firms.
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