Fraud Detection Techniques

Fraud Detection Techniques

MAIN BODY...................................................................................................................................3
1. Give short answers for the following questions...........................................................................3
i. Explain the term ‘fraud risk factors.’........................................................................................3
ii. What control mechanisms could be adopted against corruption?...........................................3
iii. Outline the main benefits of using analytic procedures in an audit process...........................3
iv. What are the common rationalisations for a fraudster, which tempt him to commit fraud?. 3
v. Outline the important points to be considered when evaluating fraud risk factors ...............3
vi. Analytic procedures are used throughout the audit process for three primary ......................3
purpose. .......................................................................................................................................3
2. ‘Circumstances may exist that create opportunities for management or other staff to commit
fraud’. Discuss ............................................................................................................................4
3 SAS 99 suggests that key sources for the identification of fraud risk factors are inquiries of
Management,’ in this context which type of questions should an auditor ask the management?
......................................................................................................................................................4
CASE STUDY.................................................................................................................................4
What type of evidence do you think the expert would have gathered for his report? ................4
Which documents could have helped the forensic expert in gathering evidence?......................4
REFERNCES ..................................................................................................................................5

MAIN BODY
1. Give short answers for the following questions
i. Explain the term ‘fraud risk factors.’
Fraud is that kind of wrong that is committed by an an person in order top earn secret
gain out of it. Such kind of crimes are very known in corporate world. Various factors are there
that has been impacting nature of item size, value, ease of sale and various other functions that
makes an business run. Such factors are being formed due to management, opportunities and a
fraudulent act.
ii. What control mechanisms could be adopted against corruption?
Mechanism that can be adopted against corruption is that analysis of accountant system
should be done, ethical code of conducts applicability should be checked. Procedure followed in
a project should be monitored(Robinson and Aria, 2018).
iii. Outline the main benefits of using analytic procedures in an audit process
During fieldwork auditors can be used in analytical procedures that has been obtaining
evidence, sometimes with the combination of substantiate testing procedure which has
combination with other substantive testing procedure which has been identifying of all kinds of
misstatement within account balance.
iv. What are the common rationalisations for a fraudster, which tempt him to
commit fraud?
Common rationalism fraud is being committed in an organisation through ill treatment of
employee, less cooperativeness and giving unnecessary stress of performing well.
v. Outline the important points to be considered when evaluating fraud risk factors
Monitor your data, establish proactive communication with employees around fraud, and
implement company policies on confidentiality. Also set up a whistle blower hot line, hire the
right people.
vi. Analytic procedures are used throughout the audit process for three primary
purpose.
Analytical procedures generally follow these five steps:
 Form an independent expectation about an account balance or financial
relationship.