Auditors Crack Down on Corporate Fraud, Boosting Accountability
The study looked at how external auditors in Australia respond to fraud in client organizations. They wanted to see if auditors do more work (shown by higher audit fees) when clients have experienced fraud. They found that auditors charge higher fees when fraud has occurred, especially in companies with better corporate governance and internal controls. Specialized auditors in certain industries also tend to charge more for audits after fraud.