What Does a Fraud Auditor Do?

A fraud auditor is responsible for detecting and preventing various types of fraud. Regulatory agencies typically employ these individuals, and the majority of those who work in these positions have a background in finance or accounting. An auditor, like most regulatory agents, is responsible for safeguarding the interests of consumers, businesses, government organizations, and other institutions from unethical individuals’ actions.

An auditor may be tasked with developing standardized procedures for internal accounting and bookkeeping in order to prevent fraud. These auditing procedures must be followed organizations that operate in specific industries or geographic regions. These organizations may be required to hire external auditors to conduct regular accounting reviews in some cases. The fraud auditor may visit these entities on a regular basis to ensure that procedures are being followed correctly. An auditor typically has the authority to perform an impromptu audit on any aspect of a company’s financial operations at any time.

Despite the implementation of safeguards such as standardized accounting procedures, many sophisticated fraud operations go undetected for long periods of time. Whistleblowers are responsible for bringing many of these situations to light. As a result, many regulatory agencies have established fraud hotlines or websites where people can report suspected fraud. Such complaints must be investigated an auditor, who will also interview the whistleblowers. The auditor must decide whether the allegations are baseless or if a full investigation is necessary.

The fraud auditor assembles a team of accountants and assigns specific responsibilities to each of them during an audit or investigation. Financial reports, bank statements, securities transactions, and other documents that may contain evidence of fraud are examined accountants. In addition, the fraud auditor works with the police or other government agents who are in charge of questioning people who are suspected of being involved in the fraud. The auditor collects data from both interrogators and accountants and is ultimately responsible for determining whether or not fraud has occurred. Some fraudsters conduct operations involving multiple entities, in which case the auditor must notify other agents to investigate the accounts of entities that may have been affected a specific fraud case.

A fraud auditor, in most cases, must have earned a bachelor’s degree in accounting, mathematics, or a related field. Many countries’ laws require auditors to be certified accountants, so a fraud auditor may be required to pass a regulatory exam before starting work. Some employers prefer to hire auditors with prior experience working in specific industries, such as financial services or securities, because these individuals are familiar with these firms’ accounting practices.