Published Paper Details:

This paper on literature review critically assesses the auditor's role in fraud detection of financial statements, focusing on the ongoing mismatch between professional ability and public expectation. The paper draws on auditing guidelines, behavioral studies, and regulatory reactions post-scandal to highlight what fraud detection auditors can actually do and what is expected by stakeholders. The paper reviews the fraud triangle model to explore how pressure, opportunity, rationalization, and capability facilitate financial fraud. Specific focus is placed on separating fraudulent financial reporting from asset misappropriation, the difficulties presented by management override of controls, and audit sampling and time-based limitations. The paper integrates research on audit procedures, professional skepticism, corporate governance devices, and technological advances such as data analytics and artificial intelligence. Through case studies of influential accounting scandals, the review analyzes regulatory reactions, litigation effects, and cultural forces affecting fraud prevalence in varied settings. Analysis indicates that auditors identify fraud but that detection frequently happens accidentally instead of systematically, and core contradictions between audit economics and thorough fraud investigation are still unsolved. The review concludes that enhancing fraud detection calls for realistic expectation management, skepticism training improvement, strategic technology implementation, and perhaps reconceptualization of relationships between financial statement auditing and fraud investigation.