Revisors håndtering af besvigelser i SMVer: En empirisk undersøgelse af revisors arbejde med besvigelsesrisici i SMV'er
Oversat titel
The Auditors handling of fraud in SMEs: An empirical study of auditors’ work with fraud risks in SMEs
Forfatter
Semester
4. semester
Uddannelse
Udgivelsesår
2025
Afleveret
2025-12-30
Antal sider
104
Abstract
Fraud poses a significant threat to the reliability of financial reporting and the trust placed in audited financial statements by stakeholders. Although the primary responsibility for preventing and detecting fraud lies with management, auditors are required to obtain reasonable assurance that the financial statements are free from material misstatement due to fraud or error, in accordance with the International Standards on Auditing (ISA). This responsibility is particularly challenging in small and medium-sized enterprises (SMEs), where internal controls are often limited, resources are constrained, and management is closely involved in daily operations. The purpose of this thesis is to examine how auditors can effectively identify and prevent fraud in SMEs without exceeding the scope of the statutory audit engagement. The study addresses the research question: How can auditors identify and prevent fraud in small and medium-sized enterprises, where internal controls are often limited, without exceeding the boundaries of the audit engagement? To answer this question, the thesis explores the specific characteristics of SMEs that increase fraud risk, the applicability of relevant auditing standards, and the practical limitations faced by auditors in this context. The theoretical framework is based on ISA 240 and ISA 315, supplemented by the COSO framework for internal control and the Fraud Triangle and Fraud Diamond models, which explain the behavioral and organizational factors underlying fraudulent actions. In addition, the audit expectation gap is incorporated to analyze the discrepancy between public expectations of auditors’ responsibilities and the actual scope of the audit as defined by professional standards. Methodologically, the thesis adopts an abductive research approach and applies a triangulation of methods. The empirical analysis consists of a case study from the Danish Audit Oversight Authority, qualitative semi-structured interviews with auditors experienced in SME audits, and a quantitative questionnaire survey distributed among practicing auditors. This combination enables a practice-oriented analysis of auditors’ handling of fraud risks in SMEs. The findings show that auditors face significant challenges in SMEs due to weak internal controls, limited segregation of duties, and a high degree of reliance on trust-based relationships with owner-managers. While auditing standards provide a structured framework for identifying and responding to fraud risks, their application in SMEs often requires professional judgment and a proportionate approach. The study also finds that the audit expectation gap remains pronounced, particularly in SMEs, where stakeholders may overestimate the auditor’s role in detecting fraud. Overall, the thesis concludes that although auditors cannot eliminate fraud risk in SMEs, they play a crucial role in mitigating it through risk-based planning, professional skepticism, and targeted audit procedures, while operating within the defined limits of the audit engagement.
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