Experts who spoke at the PCAOB's advisory group meeting on Thursday seemed unconvinced that companywide forensic audits would be cost-effective or, indeed, effective at all.
The idea that public companies should undergo periodic forensic audits designed to detect fraud failed to excite a panel of audit experts during a meeting of the Public Company Accounting Oversight Board's Standing Advisory Group. Most members of the panel seemed unconvinced that a companywide forensic audit would be cost-effective — or, indeed, effective at all.
"There is a general lack of understanding regarding forensic procedures and their application, and this lack is not limited to the public at large," said Brad Preber, managing partner for Grant Thornton's Western Region Economic Advisory Practice. Preber argued that "there are no generally recognized standards to perform a 'forensic audit,'" and cautioned that if the approach is one of "open the books and see if you can find anything," the results will be "outrageously expensive and [will raise] significant issues of potential liability because you are searching for something that you aren't sure exists."
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