[GovernmentShrinker]

Never a guarantee, but you can sure improve the discovery rate. And how many auditors have you heard of whose compensation packages would result in a huge windfall for them if they uncovered a huge fraud? There’s a huge amount of pressure on auditors to keep the client happy (in the case of outside auditors hired to produce audited financial statements), and on internal auditors not to rock the boat and to play along with internal politics (which are controlled by the senior executives whose units are producing the highest profits), and on regulatory auditors to follow procedures and follow orders from above. There is no category of auditors which is incentivized to uncover fraud beyond the level of scams operating out of a boiler room.

[IYAS9YAS]

Everything you mentioned is true, especially on internal audits. Internal auditors should report only to an independent audit committee, but that isn't always the case. Audits are very political. Keep the client happy at the cost of your reputation. It really didn't work too well for Arthur Andersen.

You most certainly can improve the discovery rate, but it still won't give you 100%.