Abstract
The high litigation risk faced by accountants is reason enough for professionals to sharpen their fraud focus and exceed the demands of professional standards. A list of suggested modifications of procedures that could be implemented if fraud is suspected includes: 1. obtaining evidence from more independent sources, 2. performing certain procedures on a surprise or unannounced basis, 3. interviewing personnel involved in areas where fraud risk is a concern to obtain their input about the risk and whether or how controls address the risk, 4. performing procedures at or near year end, 5. contacting major suppliers and vendors orally, 6. performing a detailed review of year-end adjusting entries and/or entries requiring judgment or estimates and/or unusual entries, and 7. performing substantive analytical procedures, including the development of an expected dollar amount, at a high level of precision, to be compared to a recorded amount.