1. The challenge with internal controls is that it is not always the line staff that break the controls. Most often, the person committing fraud is a manager responsible for the internal controls - someone with the authority to override the whole system. In this case, how do ensure that internal controls are in place? Also, do the new rules state that the auditor has to look for fraud?
Respond to following:
2. Is an auditor responsible for detecting fraud, or just making sure that the financial statements don't have material misstatements and conform to GAAP?
3.. What does an auditor test for in their procedures - and can these truly find fraud?
4. What is the best audit opinion to have - qualified or unqualified or going concern?
5. If you were on the audit committee, what do you really think you've learned from the auditors communication?