How could auditors assess the rationalization of fraud?

Research output: Contribution to journalArticlepeer-review


This study aims to explore methods that external auditors can use to assess the rationalization of fraud in fraud risk assessment in auditing.

An online questionnaire was used to collect data from 150 Big 4 auditors.

The results reveal a total of 18 methods that auditors can use to assess the rationalization of fraud. However, some methods were recommended more than others by the auditors in this study. These methods include incorporating the assessment of rationalization into the assessment of motives for fraud and integrity, understanding the client’s business and regulatory environment, inquiring management and the board of directors about past fraud cases and observing management responses and reactions during auditors’ inquiry about fraud-related matters.

Practical implications
The guidance provided by this study could help enhance auditors’ skills in assessing fraud risks, which, in turn, may increase the likelihood of detecting fraud. The guide could also be helpful for audit firms in their fraud training programs.

This study is the first to explore methods for assessing the rationalization of fraud by drawing on the experience and insights of Big 4 auditors.
Original languageEnglish
Pages (from-to)1458-1467
Number of pages10
JournalJournal of Financial Crime
Issue number4
Early online date20 Oct 2021
Publication statusPublished - 30 Sept 2022


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