Most of the others replying here are generally saying fraud is missed because it's complicated; however, in my opinion, it's because the auditors don't know anything else other than "do the numbers add up". Once the numbers do add up, they stop there.
The vast majority of auditors are only 3 year or less years out of school. They don't even know how a corporation is run at that point, so how are they supposed to catch anything suspicious.
The vast majority of auditors are only 3 year or less years out of school. They don't even know how a corporation is run at that point, so how are they supposed to catch anything suspicious.