According to KPMG, 75% of organizations experienced some level of fraud in the last 12 months. Seven percent reported problems with fraudulent financial reporting and these had an average annual cost of over $250 million. The 2004 Report to the Nation of the Association of Certified Fraud Examiners included evidence on over 508 frauds that resulted in over $761 million in losses. The GAO report on financial statements restatements reported 919 financial statement restatements in a 5 year period. While all of these may not have been due to fraud, the incidence of fraud is not a matter of a few isolated instances.

How does this impact auditing?