Publication Date


Document Type


First Advisor

Esmond-Kiger, Connie

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy


This paper looks at the expected effects Statement on Auditing Standards (SAS) No. 82 will have on the public and private accounting professions. The effects offtaud not detected in a timely manner may have detrimental effects on both the deftauded company and the external auditors. The American Institute of Certified Public Accountants (AICPA) proposed the new SAS (SAS No. 82 " Consideration of Fraud in a Financial Statement Audit") in an attempt to clarify the auditor's responsibility for detecting ftaud in a financial statement audit. This study looks at how management level and above auditors and accounting personnel in several industries feel regarding the effectiveness of this standard and the effects on ftaud. To collect data two methods were used. Interviews were conducted with six auditors (public sector) at various accounting firms. A questionnaire was given to 43 officers of private sector companies (15 of which were returned for a 34.8% response rate). The public accounting interview responses were compared to each other, then compared to the private company questionnaire responses. The questionnaires were based on a 6-point response scale. The results of this study indicate that, both the public and private sectors feel this new standard will not be very effective in combating fraud. The two sectors possess different outlooks on the standard. The public sector views the standard as a weapon for attorneys to sue auditors for not detecting fraud. The private sector, however, sees the standard in a positive way because they will improve their company's internal controls to detect more fraud before it happens. Both sectors, however, felt this standard will do little in the area of deterring fraudulent crimes.


31 pages




Northern Illinois University

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