EIRP Proceedings, Vol 7 (2012)

Implications of Fraud and Error Risks in the Enterprise Environment and Auditor’s Work

Emil Horomnea, Tanasa Florentin


Abstract: The objective of this study is to identify and analyze the main correlations and implications of fraud and error in the business environment and in the financial scandals occurred in the last decade. The approach envisages a synthesis and antithesis of the ideas found on this subject in the specialty literature, of the regulations issued by various international bodies. To achieve the established objectives, we used a constructive methodology to identify criticism, presentations and developed a speech with view to a more efficient and effective fraud and error risk management. The results of the study show that the major financial scandals and hence the global economic crisis are based largely on fraudulent maneuvers of significant proportions. By using "creative accounting" in fraud and error, famous companies have managed to distort reality for their performance and market position, misleading the users’ perception. This study is a theoretical having implications for a future empirical study.The study contributes to auditing literature diversification in the field of risk of fraud and error. An additional perspective is gained by addressing the financial crisis and some famous bankruptcies by way of the financial auditors activity and the fraud and error risk.


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