Auditors and Terrorism

There were 655 “significant” terrorist attacks in 2004 according to U.S. government figures. Fortunately, none of them happened on American soil. But that doesn’t mean Americans are safe or that they can ignore potential terrorist activity around them.

Author Michael C. Kristek, CGFM, explores the roles of financial auditors in helping to prevent terrorist attacks in a dirty bomb case study published in the Spring 2005 issue of the Journal of Government Financial Management. People generally do not think of auditor as one of the first lines of defense protecting Americans from terrorism. Yet, as the author points out auditors may in fact be in an ideal position to identify potential terrorist activities and financing.

“In performing their duties, the auditors need to stay alert for ways to protect their organization’s assets and recognize the effect those assets can have on the surrounding community and the nation at large,” the author states in his introduction.

Although the article focuses on a dirty bomb theory, many of the conclusions drawn by author apply to auditors in general. These include:

  • Auditors need to be educated about terrorism.
  • Auditors should consider the types of terrorism likely to be uncovered based on the type of audit being conducted.
  • Auditors need to share their findings, especially regarding weaknesses terrorists could exploit and potential terrorist activity with as many people as possible including executives within the organization and, where appropriate, government and law enforcement officials.

Kristek recommends auditors wishing to become educated about terrorism begin with two online resources: the Interagency OPSEC Support Staff website and the Committee on Present Danger website.

The federal auditor’s oath of office includes the words: “I will support and defend the Constitution of the United States against all enemies, foreign and domestic, that I will bear true faith and allegiance to do the same; that I take this obligation freely, without any mental reservation or purpose of evasion and that I will well and faithfully discharge the duties of the office which I am about to enter.” Many state and local auditors take similar oaths. It isn’t the oath that makes auditors vigilant, however, vigilance is in their nature combined with the desire to protect the public from all threats, be they financial shenanigans or dirty bombs.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.