The recent crisis in the financial markets has left many questioning the extent to which business managers are able to manipulate their financial accounting numbers and in doing so inflate their bonuses and mislead their investors and creditors. In October 2008, the PCAOB issued PCAOB Release No. 2008-006, "Proposed Auditing Standards Related to the Auditor's Assessment of and Response to Risk." The PCAOB's stated goal is to emphasize to auditors that fraud risk assessment is a central part of the audit process. A study explores fraud-related accounting research to identify information which would be relevant to oil and gas accountants in developing procedures for fraud-risk assessment. A screening tool developed by Dechow et al. (2008) is utilized to compare fraud-related scores of oil and gas firms versus firms in other industries for each year in the period of 1990-2007. It is observed that, for nine of the 18 years in the study, the fraud-related F-scores of oil and gas firms are significantly higher than the scores of the control sample of companies in other industries.
ASSESSING FRAUD RI
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"ASSESSING FRAUD RISK: HOW DOES THE OIL AND GAS INDUSTRY STACK UP?"Please download to view full document