AC562_Week_6 - AC562 Fraud Fraud Auditing Three Types of...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
AC562 – Fraud Fraud Auditing
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Three Types of Fraud u Group 1:  Fraud that has been exposed  and is in the public domain. u Group 2:  Fraud that has been  discovered by entities, but detail have  not been made public. u Group 3:  Fraud that has not been  detected.
Background image of page 2
Group I Fraud – Exposed and in the Public Domain u Victims have discovered it. u It was discovered mostly by accident u Sufficient evidence was gathered to  prosecute the perpetrators successfully. u The fraud has been submitted to and  accepted by prosecutors for prosecution.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Group 2 Fraud – Known by a Few but Not Made Public u Discovered by victims and kept  confidential by victims. u Identifying the perpetrator may risk  defamation for the victim. u Cases vary in the degree of evidence  that the victim possesses. u No way to determine the true nature of  these cases.
Background image of page 4
Group 3 Fraud - Undetected u Victims do not know or  suspect the fraud. u No possible way for  anyone to determine the  true nature of the fraud  case.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Nature of Fraud u Four reasons for the accuracy of  researchers: The cases in group 1 are available for empirical  study. They have been studied many times by different  researchers. Experienced fraud auditors and investigators tend  to concur with the conclusions. All observations tend to ratify each other.
Background image of page 6
Three Principal Fraud Combatants u Three principals fraud  combatants are: Independent auditors (certified  public accountants (CPAs) Internal auditors Criminal investigators
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Financial Statement Balance Fraud u Land Flipping u Large Petty Cash  Fund u Fraud Dilemma
Background image of page 8
Pro Active Fraud Auditing u Three Objectives of Fraud Auditing In the proactive stage:  To search competently  and persistently for indicia of fraud. In the reactive stage, to search for validating  evidence. To deter fraud by increasing the risk of detection. u Proactive Fraud Auditing u Pre-discovery stage u Post-discover stage.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Deterring Fraud by Increasing the Risk of Detection u Deterring Fraud by Increasing Risk of  Detection Perpetrators do not want to be caught Evidence of investigation would serve as a  deterrent When no risk, only moral restraints keep  people with few or no moral values from  the easy money.
Background image of page 10
For the Inexperienced u Avoid premature entanglement in developing endless facts and  circumstances of a case of fraud, at the exclusion of identifying a  perpetrator or perpetrators, and proving their involvement.
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/11/2012 for the course AC 562 AC 562 taught by Professor Online during the Spring '11 term at Keller Graduate School of Management.

Page1 / 42

AC562_Week_6 - AC562 Fraud Fraud Auditing Three Types of...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online