Recent Research on the Identification, Assessment, and Response to Fraud Risks: Implications for Audit Practice and Topics for Future Research

Abstract

The financial statement auditor’s identification of fraud risk factors, their assessment of fraud risk, and their fraud risk responses are key to the auditor’s consideration of fraud and fraud detection. Given that the last review of research related to the search for fraud during the audit occurred nearly a decade ago, we provide a summary of recent academic research to update and inform practitioners, researchers, standard setters, regulators, and other stakeholders in the financial reporting process. We categorize and summarize findings from recent academic studies that focus on the auditor’s identification, assessment, and responses to fraud risks. Implications for practice are presented for each of these areas, along with topics and questions for future research.