Watch our recent webinar that details the importance of confirmations in auditing and why auditors should pay attention to rapidly evolving standards.

Key takeaways include:

1. What kinds of risks are associated with modern day fraudsters.
2. Why auditors should use digital confirmation platforms to enhance security and efficiency in the confirmation process.
3. What firms should know about the ‘familiarity threat’ to maintain professional skepticism, especially with long-term clients.
4. Why firms should prepare for upcoming changes in auditing standards that will require confirmation of cash in all audits.
5. How standards require auditors to confirm not just bank balances but also other financial relationships.

Our expert panel:

• Scott Spradling | Executive Director, Audit Innovation

• Dale Wolfe | Client Executive Manager

• JW Amos | Product Marketing Manager

Topics covered:

Understanding Fraud Risk

There are several hidden costs of fraud, especially for private companies. While infrequent, audit-related claims can have severe repercussions, including monetary losses, time consumption, and reputational damage. These issues aren’t just related to fraud but also to accidental misstatements. Maintain professional skepticism is paramount to reducing risk for you and your firm.

Common Cash Fraud Techniques

Common cash fraud techniques include falsifying bank statements, kiting, and improperly accounting for held checks. These schemes are difficult to uncover through traditional means. Bank confirmations are still the most dependable way to detect them.

Fraud Prevention Strategies

Dale Wolfe discussed the benefits of using digital confirmation platforms, including enhanced security, efficiency, and maintaining control to prevent client interception. He emphasized the importance of ensuring that the right people within financial institutions are responding to confirmations by trusting a digital platform like Confirmation.

Real-World Impact of Fraud

20% of non-public audit claims involve failure to detect fraud, and the number of fraud cases in the private sector may be larger in volume than in the public sector.

Major Fraud Cases

High-profile fraud cases such as Wirecard, Peregrine Financial Group, and Shepherd Capital Management have illuminated the risk to audit firms by using alternative procedures. Learn how they were carried out and how they could have been prevented.

Recent Changes to Audit Standards

Scott Spradling dives deep into audit standards, focusing on the ‘familiarity threat’ as described in the AICPA code of professional conduct. This threat, which can lead auditors to become too sympathetic to clients’ interests or too accepting of their work, can be catastrophic.

Direct Access and Confirmation Requirements

Do you know the difference between ‘direct access’ and ‘direct viewing’? Auditing standards are clear that simply looking over a client’s shoulder while they log into their banking portal is not a substitute for confirmations. In this webinar, you’ll learn about the upcoming changes in both public and private company audit standards regarding cash confirmation requirements.

Undisclosed Financial Relationships

Both AICPA standards and the new PCAOB confirmation standard emphasize the importance of confirming undisclosed financial relationships. To defend against fraud allegations, firms will need to also document why they skipped this step.

Upcoming Changes in Auditing Standards

There are several changes in auditing standards that could disrupt auditor’s current workflows, including the PCAOB standard effective in 2025 that will require confirmation of cash and cash equivalents in all audits. He also mentioned that the AICPA is considering adopting similar requirements for private company audits.

Are you prepared to safeguard your firm against fraud?

Sign up for your free Confirmation account today to experience immediate benefits:

• Reduce the audit confirmation process from weeks to just days and save more than 50%
• Administra todo el proceso de confirmación digital desde una sola plataforma
• Rely on our robust data-security system that keeps your clients’ data safe

Sign up for free today