Definition
External Audit Detection refers to the identification of irregularities or Fraud by independent external auditors during the audit of financial statements.
Context
External Audit Detection typically occurs within statutory audits and focuses on material misstatements in financial reporting. It is closely linked to Financial Statement Fraud, Internal Control, and Compliance, but is not primarily designed to actively detect Fraud.
Meaning
External Audit Detection plays an important control role but identifies only a portion of Fraud, as external audits are risk-based and not designed as forensic investigations.
Example
Material misstatements identified during the audit of financial statements.
Sources
Suggested citation
wirtschaftsforensik.ch Editorial Team: "External Audit Detection", in: Glossary, wirtschaftsforensik.ch, https://wirtschaftsforensik.ch/glossar/external-audit-detection/, accessed April 18, 2026.