Are Internal Auditors required to consider fraud in their duties?

Internal auditors play a significant role in an organization's governance, risk management, and control processes. They are required to consider fraud as a part of their responsibilities due to the potential impact of fraudulent activities on the organization's financial statements, operations, and reputation.

Internal auditors must evaluate the effectiveness of the organization's internal controls in preventing and detecting fraud. This includes assessing the risk of fraud, whether it originates from employees, management, or external parties. Their work is not solely about compliance with regulations and policies but also about ensuring that the organization's resources are used efficiently and that its objectives are met without the negative influence of fraud.

While the specific requirement to investigate fraud may vary depending on the regulations, company policies, and the nature of the audit, the emphasis on fraud risk assessment is a crucial aspect of the internal audit function. Therefore, the assertion that internal auditors do not need to consider fraud in their duties is not accurate, as addressing fraud is integral to their role in safeguarding the organization’s assets and ensuring integrity in reporting processes.