A Proposed Framework for an Internal Forensic Auditing to Manage the Risk of Fraud in Financial Statements to Support the Decision of the External Auditor to Rely on the Work of Internal Auditing: A Field Study in Egypt.

Serag, Asmaa Abdel Moneim; Eissa, Hoda Hameem

doi:10.21608/abj.2022.266871

A Proposed Framework for an Internal Forensic Auditing to Manage the Risk of Fraud in Financial Statements to Support the Decision of the External Auditor to Rely on the Work of Internal Auditing: A Field Study in Egypt.

المؤلفون

¹ کلية التجارة - دجامعة طنطا

² کلية التجارة - جامعة طنطا

10.21608/abj.2022.266871

المستخلص

   This Research aims to develop a proposed framework for an internal forensic auditing to manage the risks of fraud in the financial statements to support the external auditor’s decision to rely on the work of the internal auditor in Egyptian companies.
     The proposed framework is derived from a number of steps: first, forensic auditing techniques that are used to detecting and prevent balance sheet fraud are analyzed, for example: Data Mining Technique, Computer Auditing, Laboratory Analysis of Physical and Electronic Evidence, Critical Point Auditing Technique, Continuous Monitoring, Data Analysis, Source and Use Analysis of Funds, Benford Law, Proactive audit, Brain storming, then analyze the role of internal auditing in the management of fraud risks in the financial statements, finally, a combination of forensic auditing techniques and the internal audit fraud risk management program is intended to increase the efficiency of the internal audit work and thus influence of the external auditor's decision to rely on internal auditing work to detect and prevent fraudulent financial statements.
       Three hypotheses related to the opinions of external auditors, internal auditors and academics on the proposed framework were tested by
statistical methods appropriate to the type of data, and finally, research hypotheses were accepted.
The overall results indicate that from the point of view of the internal auditors and the external auditors, the proposed framework for merging the methods of forensic audit with the internal audit risk management program increases the efficiency of the internal audit work and makes the external auditor more dependent on its work.
    The future research should focus on challenges facing the integration of forensic auditing and internal audit methods in the Egyptian business environment, whether in companies or banks and developing solutions for them.

الكلمات الرئيسية