The Use of the Financial Analysis in Improving the Efficiency and Effectiveness of the External Auditor in Detecting Financial Fraud - An Analytical Study

This study aims to develop a practical framework for the International Auditing Standard No.(520) and the statement of audit Standard No.(56)by illustrating how to apply financial analysis to help the auditor to discover financial fraud and also clarify how to use the process of brain storming. The researcher found that financial analysis itself does not lead to detect financial fraud, but helps to identify factors that may involve the existence of financial fraud, that relies on the financial analysis un comparing its results with any standards do not achieve the target purposes. The main recommendations: auditor should apply analytical procedures at the process, to help the auditor to understand the customer's work. Expedition of audit testing should be a reflection of responses of financial analysis.