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Cindy Vance will present March 24 Faculty Research Forum on auditing fraud

ISSUED: 7 March 2016
MEDIA CONTACT: Valerie Owens

SHEPHERDSTOWN, WV — The next Shepherd University Faculty Research Forum will delve into the world of business auditing when Cindy Vance, assistant professor of accounting, presents “The Effects of Auditor Certification, Professional Skepticism, and the Presence of Fraud on Fraud Risk Assessment Performance.” The presentation, which is free and open to the public, will take place Thursday, March 24, at 12:30 p.m. in the Robert C. Byrd Center for Congressional History and Education auditorium.

Vance is a licensed certified public accountant, serves as a consultant in the accounting field, and has worked as an auditor. She became interested in financial statement fraud when she began teaching ethics courses at Shepherd.

“We do a lot of case studies in those courses where we look at corporations like Enron, and we dissect the financial statement looking for the fraud that was present,” Vance said.

Enron was an energy company that went bankrupt in 2001 after accounting fraud was discovered. Vance is working toward her Ph.D. in business administration. For her dissertation, she is researching whether there’s any benefit when an auditor who conducts a fraud risk assessment is a Certified Fraud Examiner. The CFE credential is offered by the Association of Certified Fraud Examiners (ACFE).

Vance said many times companies do their own risk assessment, which is a pre-audit step that shows if there’s a high risk of fraud. She said companies hope for a low-risk designation because it saves them money. Auditors need to spend more time taking a closer look at the books for high-risk companies.

Vance is an ACFE member, and she hopes to get at least 200 members of the organization to participate in her research. She plans to ask auditors to fill out a questionnaire assessing their professional skepticism skills when they do a fraud risk assessment of a publicly held corporation. Vance wants to measure whether a CPA who is also a Certified Fraud Examiner is more skeptical when conducting a pre-audit.

Vance said there is no rule or law that says someone doing a risk assessment has be a Certified Fraud Examiner. But she said it would benefit the public if CPAs had the extra training, and she thinks members of the public should be concerned because many are stockholders.

“They’re investing in these corporations and they depend on the auditors to help them feel confident that there is not financial statement fraud,” Vance said. “If there is financial statement fraud because the auditor did a poor risk assessment, or because the auditor is not skeptical or knowledgeable enough, then the public is going to be hurt because the corporation is going to go bankrupt.”

Listen to the interview HERE.

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