Approaching the Risk of Fraud in the Audit of European Projects

Abstract

Audit reports provide a support for management authorities to ensure that the nonreimbursable European funds provided to beneficiaries in EU Member States are used in their intended manner and that irregularities and frauds do not affect the EU’s financial interests. Approaching the risk of fraud by financial auditors during their engagements is treated by the International Standard on Auditing 240 which explains the auditors’ responsibilities regarding fraud in an audit of financial statements. Auditors must identify and assess the risk of material misstatements due to fraud and respond accordingly through the audit procedures they perform and the audit opinion they issue. ISA 240 specifically refers to the audit of historical financial statements and is mainly applied in the audit of statutory annual financial statements of companies. In this paper, we have researched how the actions prescribed by ISA 240 can be applied in the missions regarding the audit of EU-funded projects.

Keywords

• financial audit
• fraud risk
• eu-funded projects