Week 2: Planning the Audit - Quiz
1. (TCO B) One of the primary purposes of the planning is to: (Points : 3)
Identify possible operational area problems. Identify competitive pressures. Followup on earlier audit issues. Interview senior managers new to t
Corporate Culture (Anita) Description of audited area We reviewed the corporate culture of WorldCom to identify those areas of deficiency where positive improvements could be made. The following major areas for operational improvement were
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 15 Occupational Fraud and Abuse: The Big Picture I. Defining Abusive Conduct any violation of the rules of an organization A. The problem of occupational fraud and abuse cannot be totally eliminated
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 14 Conducting Investigations and Writing Reports When an Investigation is Appropriate the need for an investiagion can arise in a number of circumstances. A. Introductory Analysis 1. Uncover source o
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 13 Interviewing Witnesses Interviewing Witnesses the process of asking questions of individuals who might have information to resolve allegations of wrongdoing. A. Introductory Questions 1. Provide t
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 12 (Part 2) Fraudulent Financial Statement Schemes 5. Improper asset valuations Generally, assets should be recorded at their historical (acquisition) cost. a. Inventory valuation i. Lower of cost or
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 12 (Part 1) Fraudulent Financial Statement Schemes I. Defining Financial Statement Fraud deliberate misstatements or omissions of amounts or disclosures of financial statements to deceive financial s
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 11 Accounting Principles and Fraud I. Fraud in Financial Statements A. Who commits financial statement fraud? 1. Senior management 2. Mid- and lower-level employees 3. Organized criminals A. Why do p
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 10 Corruption Corruption an act in which a person uses their position to gain some personal advantage at the expense of the organization they represent. I. Bribery "offering, giving, receiving, or so
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 9 Non-Cash Assets I. Non-Cash Misappropriation schemes are occupational frauds in which employees misuse or steal inventory, supplies, equipment and other non-cash company assets. A. Misuse of non-ca
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 8 Register Disbursement Schemes Register Disbursement Schemes are occupational frauds in which money is removed from the cash register and recorded on the register tape. A false transaction is then r
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 7 Expense Reimbursement Schemes Expense Reimbursement Schemes are occupational frauds in which employees make false claims for reimbursement of fictitious or inflated business expenses. A. Mischaract
PRINCIPLES OF FRAUD EXAMINATION Lecture Outline Chapter 6 Payroll Schemes Payroll Schemes are occupational frauds in which a person, who works for an organization, causes the organization to issue a payment by making false claims for compensation. A. Ghos
Objectives of the Operational Review
Based on our preliminary review and discussions with you and your personnel, we believe that
the objectives of the operational review of your company would be to:
1. Determine the organization structure and review the
Three Types of Fraud
Group I Fraud Exposed and in
Increases understanding of the importance of
the proper development of an operational
Familiarize the reviewer with the five
operational review attributes - stat
AC562 Week 4
The Field Work
Chapter 4 This Chapter Will:
Increase understanding of the purpose of the
field work phase in an operational review.
Present various techniques that can be used in
the field work phase
Increase knowledge of how to
AC562 Week 3
The Work Program Phase
Chapter Three This Chapter Will
Discuss the Following:
n Benefits of the operational
review work program
n Standards by which
operational review work
programs are developed
n Who develops the work
n Work program
AC562 Week 1
Purposes and Objectives
Increase understanding of operational review
Increase understanding of the purpose
Help identify relationships and differences
Increase the skills and abilities needed
Fraud Evidence and Auditing
Sufficient evidence for conviction of
fraud is usually lacking in fraud audits.
Auditors tend to develop the
consequences of fraud, such as the
amount of the theft, but fall short in
naming the people
Occupational Fraud and Abuse:
The Big Picture
Understand and describe abusive conduct.
Determine why attempting to achieve perfection in
the workplace is not desirable.
Explain the obstacles to accurately measuring the
List the five types of interview questions.
Understand how to ask introductory
Explain how to construct informational
Understand the differences between open,
closed, and le
Conducting Investigations and
Understand the circumstances that may necessitate
an internal investigation.
Identify who should be part of a fraud examination
Be familiar with several e
Fraud Risk Assessment
Describe the factors that influence an organizations
vulnerability to fraud.
Explain the difference between preventive and detective
Understand the objective of a fraud risk assessment.
Name at least three of the
five principal financial
statement fraud schemes.
Define financial statement fraud and related schemes.
Understand and identify the five classi
Accounting Principles and Fraud
Define fraud as it relates to financial statements.
Identify the main groups of people who commit
financial statement fraud.
List the primary reasons people commit financial