Detecting bribery: a guide for external auditors – insights from the audit profession in Egypt

2016-09-20T15:31:35Z (GMT) by Rasha Kassem Andrew W. Higson
Corruption in general and bribery in particular is a topic of global concern. External auditors are required by audit standards to assess and respond to the risk of illegal acts, yet neither the audit standards nor do prior studies provide a guide for external auditors to audit bribery risks. Hence, the aim of the current study is to help external auditors assess and respond to bribery risks. To achieve this, the current study proposes a guide that might help external auditorsassess and respond to bribery risks. The proposed guide is based on evidence from prior literature and the insights from the audit profession in Egypt. Data was collected by the means of mixed methods, mainly an online questionnaire and semi-structured interviews. Our results supports the current body of knowledge that argued for the effectiveness of red flags in fraud risk assessments, however our study was the first to explore the effectiveness of red flags for bribery. Our findings also revealed that although red flags for bribery were perceived as effective in assessing bribery risks, not all of them have the same significance. Our study was the first to suggest how external auditors might respond to the heightened red flags for bribery. The current study also provides recommendations to audit regulators, audit firms, policy makers, and researchers on how to combat corruption and bribery.