Fraud Considerations in Auditing

Auditors have often treated fraud as a peripheral matter, addressing it briefly during planning or only when prompted by external alerts or findings arising during the audit. Empirical evidence shows that this mindset has not been sufficient to protect the public interest—or even the client—against the increasingly sophisticated nature of fraud. Auditors must therefore raise their game if they are to remain credible and effective guardians of the public interest when expressing an opinion on financial statements. Recent revisions to global and national auditing standards reflect this need by strengthening the auditor’s responsibility to consider fraud, embedding a more explicit “fraud lens” into risk assessment, reinforcing professional scepticism, and requiring clearer documentation and greater transparency in the auditor’s report. While auditors are not responsible for detecting all fraud, the revised approach demands a deeper and more structured evaluation of fraud risks—particularly management override, revenue manipulation, significant estimates, and related-party transactions—supported by tailored and less predictable procedures designed to counter modern fraud schemes. Auditors are now expected to challenge management more robustly, remain alert to indicators of non-compliance, and communicate fraud-related concerns more promptly and fully to those charged with governance. Our session will explore in detail these current and newly strengthened responsibilities relating to fraud.

The Speaker

Mario P Galea is a certified public accountant holding a warrant to practice both as an accountant and as an auditor. Currently practising as a business advisor providing governance oversight and advisory services to businesses and corporations. Serves as an independent non-executive director on the boards and audit committees of various listed companies in the financial and commercial sectors. Mentor and advisor to family businesses. Founder, managing partner and chairman of accountancy and audit firm EY in Malta until retirement in 2012. Specialised in auditing and assurance which he has practiced for 35 years in Malta and abroad. Lectured in auditing, assurance and professional and business ethics and led several training courses. Speaker at various business and professional conferences in Malta and abroad. Assisted businesses in several areas particularly relating to governance, accounting and systems of control. Served as President of the Malta Institute of Accountants and for many years formed part of the Accountancy Board which is the accountancy profession regulator in Malta. Served on various professional committees in Malta and abroad such as the council of the Federation des Experts Comptables (FEE) in Brussels (now Accountancy Europe). Member of the Ethics and Regulatory committees of the Malta Institute of Accountants in Malta.