The appearance of legality and the risk of fraud

Author:Ec. Carmen MATARAGIU, Ec. Anca Cristina MATARAGIU

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Keywords:materiality, planning, assessment, evidences, errors

Abstract:
Only by obtaining adequate sufficient audit evidence we can be reasonably assured about the fair view of financial statements.\r\n\r\nDuring the last 15 years, the Romanian economic environment - in the context of lacking a coherent legislative framework - created the premises of breaching the law for some investors, which has led more than once to fraud.\r\n\r\nFrauds presuppose sophisticated working schemes implying real difficulties for normal audit procedures. Usually, the operations lying behind a fraud receive an "appearance of lawfulness" from the part of the entity, simulating legal operations; thus, in order to identify them, it is essential to properly apply the recommendations of ISA-315 "Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement" and of ISA 240 Fraud and Error.

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