In their current activities, the internal auditors must: have enough knowledge in order to identify the signs of a
possible fraud; be attentive of the cases that involve a risk of fraud; and appreciate the necessity to further
investigate a case, inform the responsible persons from an organization and take actions to eliminate or reduce thepossibility of fraud occurrence. According to the National Standard on Audit 240 ‘Fraud and Error’ (SNA 240), the
auditor is not responsible and cannot be held accountable of fraud and error prevention. Furthermore, conducting an
annual audit can serve as a means to reduce the possibility for fraud and error to occur. In practice, it often happens
that when the audit points out a case of possible fraud or error, the responsible entity does not expose the situation
and tries to ‘clean up’ using their own means, usually by removing from within the entity the persons responsible for
the possible fraud or covering the losses from internal resources (rarely recovered from the guilty parties), all in
order to not tarnish their market prestige and reliability. There were quite a considerable number of cases when
following a scandal in the press, the managers of entities where frauds occurred were forced to admit in front of the
public opinion that they had knowledge (at least partially) of the respective fraud discovered after an internal audit
and that they acted to remove the losses and the wrongdoers, preferring to keep quiet precisely for protecting their
entity.