Does a transactions or probity audit aim only to detect fraud using substantive tests?

The assertion that a transactions or probity audit solely aims to detect fraud using substantive tests is misleading. While detecting fraud is indeed a significant aspect of these audits, their scope is broader than just identifying fraudulent activities.

A transactions or probity audit is designed to ensure that processes, controls, and compliance with relevant laws and regulations are effectively in place. It involves evaluating the integrity and accuracy of financial records and operational procedures, not merely through substantive tests, which focus on the details of individual transactions, but also through other means such as compliance testing and internal control assessments.

Furthermore, the nature of the audit can vary based on the objectives set forth, the specific circumstances of the entity being audited, and the risks identified. Therefore, the intention and methodology can expand beyond just fraud detection to encompass overall operational effectiveness and governance.

This understanding allows auditors to provide a comprehensive assessment of an organization’s processes, ensuring that the audit's value is maximized in terms of improving organizational effectiveness and mitigating risks, rather than simply focusing on fraud detection.