**4.3 The role of financial analysts**

Financial analysts play almost the same roles as members of the board of directors; they must always verify the information disclosed by companies. They must analyze the financial statements well and detect any contradictions [14].

For example, fraud can appear if the analyst observed a profit which increased over a certain period, while his cash flow generated by the operation (Cash Flow) fell during the same period, this contradiction meant that there is Something is wrong [15]. In other words, if the company posted positive cumulative profits over a period, while its operation posted negative figures over the same period, this is abnormal, since as normal, growing profit, this deficit must not exist, and must be absorbed by bank loans or new equity issues.

Thus, these contradictions, or these differences between profits and cash flows, are often the sign of accounting manipulations.

*Financial Fraud and Managers, Causes and Effects DOI: http://dx.doi.org/10.5772/intechopen.93494*

Analysts will try to answer these questions:


## **4.4 Role of the chartered accountant: auditor or verifier**

The chartered accountant is a privileged interlocutor of companies facing fraud; indeed, thanks to his skills in internal control, and his mastery of accounting procedures, his role is not negligible to fight against fraud, and notify her during her activities to her clients [5]. For the accountant, his investigative role consists in intervening within the framework of his advisory missions in the event of suspicion or fraud detected by the company. Its mission intervenes even before legal action in order to confirm or not the suspicions of fraud. In fact, its services are often requested either by the majority shareholders, or by a parent company operating with its subsidiaries, or by the company victim of a fraud committed by its senior managers.

#### **4.5 The auditor**

The auditor may also be invited to investigate if there is a suspicion of customer fraud. Their investigation missions can be either audit or judicial expertise missions, and this mainly depends on the legal aspects of their missions [16]. They must carry out their missions with objectivity and professionalism while respecting the principle of professional secrecy.

#### **4.6 The role of regulatory authorities**

The role of regulatory authorities in preventing and discovering fraud is not easy to do. Their main role is to establish the mechanisms that fight against fraud. They must manage complaints, and investigations against fraudsters, and they must ensure that the governance bodies and mechanisms of listed companies play their full role. Financial reporting must be reliable and communicated to the public on time. Establish mechanisms and apply sanctions against any natural or legal person, who tries to defraud or manipulate financial or accounting information, in order to profit personally.

## **5. Conclusion**

The financial scandals which have appeared in recent years have placed fraud at the heart of economic and financial issues. Following this, several measures have been adopted aimed at strengthening the regulatory and legal framework such as the Sarbanes-Oxley law in the United States (July 2002) and the financial security law in France (August 2003).

#### *Corporate Social Responsibility*

At the same time, new auditing standards have been created to increase the risk of fraud being taken into account by statutory auditors: SAS 99 standards in the United States, IFA ISA 240 standard internationally transposed in France by NEP 240.

But all of this did not stop the leaders from committing the fraud. In fact, the fraud and the accounting and financial manipulations made by the senior executives of the company have affected the confidence of investors and donors toward the company and its image on the financial market.

To remedy this, financial control authorities and even government authorities have introduced a series of regulations aimed at improving corporate transparency, for example by improving the disclosure of financial information, to which companies must comply, and which they must also publish through their official documents.

The control recommendations must also relate to the risks linked to overinvestment and good governance, via better collaboration of the boards of directors with independent, external directors and above all well experienced in the field of activity of the company and especially use auditors from well-experienced accounting firms.
