Journal of Business & Economic Policy Vol. 6, No. 4, December 2019 doi:10.30845/jbep.v6n4p7 50 How External Auditors Detecting Financial Corruption and Fraud in Financial Statement “A Case Study of Jordanian Companies” Dr. Mustafa A.A. AL-Qudah Shaqra University P. O. Box: 1040, Al-Dawadmi 11911 Saudi Arabia Abstract The study aimed to identify the Methods of the external auditors for detecting financial fraud in the financial statement for Jordanian public shareholding companies from the perspective of company’s managers, financial managers, external auditor and accountant, working in these companies. To achieve this goal questionnaire was distributed to a random sample of the study population consisting of company’s managers, financial managers, external auditor and accountant, working in these companies. The study finds that there is reasonable realization among the external auditors in Jordan about their responsibility for discovering financial corruption and fraud. The study showed that the obstacles affect the external auditor's ability to perform their professional responsibility, and it also find that external auditor's apply and follow the methods and procedures such as International Accounting Standard, Jordanian laws and regulations, to discover fraud and corruption cases. Keywords: External auditor, detecting financial corruption, detecting financial corruption and fraud, detecting fraud in the financial statement for the Jordanian companies. 1. Introduction In the modern business world, characterize with the high level of technology fraud and corrupt practices increased, and new and complicated legislation which offers new opportunities for both the perpetrators of fraud and forensic accountants. It is the responsibility of the management of every organization in the public sector environment to put in place adequate measures of control to strengthen its activities and imbibe good corporate governance practices. Financial statement fraud is one of the biggest challenges in the modern business world, when corporations engage in certain practices. Financial statement fraud may be committed by the senior and mid-level management of the corporation to fraudulently enhance the financial health of a business and enrich one's own net worth. Fraud is a serious problem and is often given special attention in the field of accounting and auditing. To be fair, a financial statement overall must be free from material misstatement, caused by fraud or error. Because of the basic nature of fraud which is complex and dynamic, so that as the times progressed, it encourages more diverse fraud. Fraud is very detrimental both to the organization and to the economy (Zimbelman et al., 2014). Financial statement fraud is deliberate misrepresentation, misstatement or omission of financial statement data. Top management is usually at the center of financial statement fraud because financial statements are created at the management level. Financial statement serves as a tool for communicating to users and stakeholders the true and fair view of the company. Financial statement shows where the company is, and where it is heading. (Weygandt and Warfield, 2007) assert that financial statements are useful for the assessment of a company’s liquidity, solvency, financial flexibility and performance. International Standard on Auditing (ISA 240), defined Fraud as an intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage. Financial statement fraud is a deliberate misstatement of material facts by management in the books of accounts of a company with the aim of deceiving investors and creditors. This illegitimate task performed by management has a severe impact on the economy because it significantly dampens the confidence of investors. (Spathis, 2002) notes that, regardless of the type of company, the percentage of financial statements that contained fraud in information is quite high. Against this background, researchers, management, lenders, workers, suppliers, clients and the community at large have demonstrated a great interest in the detection fraud in financial statements. There are strong research concerns for detecting fraud in financial statement.