EMPIRICAL STUDY FOR THE STRATEGIC ROLE OF INTERNAL AUDIT IN DEDICATING FRAUD RISK IN THE FINANCIAL STATEMENT: EVIDENCE FROM IRAQ

Abstract

An audit is a regular and systematic process to collect and impartially evaluate evidence of management claims in relation to economic activities and events to determine the extent to which these claims comply with predetermined criteria and to report results to stakeholders. The study aims to know the strategic role of internal audit in detecting the risks of financial fraud, in addition to identifying the basic concepts of internal auditing and the types of fraud risks in the financial statements, and clarifying the role of the internal auditor in detecting the risks of financial fraud, by knowing the impact of the planning process and professional skepticism and understanding The work environment and its contribution to support the internal auditor in detecting fraud risks in the financial statements, and the study concluded that the internal auditor when developing an audit plan, must develop an integrated vision of the effectiveness of governance and risk management, which contributes to reducing the risks of fraud in financial information. In addition, he should consider the institution's evaluation of fraud risks and may evaluate the company's fraud detection abilities on a regular basis. The ability of the internal auditor to continuously assess the potential risks resulting from the work environment helps in discovering the risks of fraud in financial information, in addition to the internal auditor's knowledge of the nature of the work environment in which he works helps to know the risks and detect financial fraud. The internal auditor should identify the potential effects of fraud and discuss the matter with the appropriate level of management, whom management decides to initiate a full investigation and this is achieved through the professional skepticism of the auditor.