FR-101 CATCHING THE BAD GUYS: EMBEDDING FRAUD DETECTION INTO AUDIT

FR-101 CATCHING THE BAD GUYS: EMBEDDING FRAUD DETECTION INTO AUDIT

DESCRIPTION

Auditor’s today are expected actively participate in prevention and detection of fraud in their organizations. A traditional audit catches less than 4% of existing frauds because audits are designed to test effectiveness of controls and evaluate operating efficiency, not find fraud. Embedding fraud awareness, prevention and detection into auditing requires understanding fraud schemes and fraudster characteristics.

 

This course provides the fundamentals for developing fraud audit programs and incorporating fraud detection into the standard auditing process. This in-depth course looks at the fraud tree and covers common fraud schemes and scenarios to provide the participants with the knowledge needed to start implementing fraud detection into their audit processes immediately. This interactive course will be taught through a combination of lecture, group exercises, and class participation.

LEARNING OBJECTIVES:

  • Understand fraud fundamentals – fraud triangle, fraud tree
  • Common fraud schemes and scenarios
  • Characteristics of fraudsters
  • Knowledge of Prevention and Detection Programs for fraud
  • Implementing fraud auditing techniques into an audit
  • Conducting investigations

 

COURSE OUTLINE

Principals for Managing Fraud Risk in an Organization

  • Governance
  • Fraud risk assessment
  • Prevention
  • Detection
  • Reporting

Fraud Risk Assessment Basics

  • Conducting a Fraud Risk Assessment
  • Fraud Risk as part of an overall Enterprise Risk Management (ERM) program
  • Potential obstacles and pitfalls for Fraud Risk Assessments
  • Best practices in Fraud Risk Assessment
  • Internal Audit’s role

Fraud Basics

  • The Fraud Triangle
  • ACFE 2018 Report to the Nations
  • Fraudsters—characteristics and behaviors

The Fraud Tree: Schemes and Scenarios

  • Corruption – Conflicts of interest | Bribery | Illegal gratuities | Economic extortion
  • Financial Statement Fraud – Asset and revenue overstatements/understatements
  • Asset Misappropriation—Cash
  • Asset Misappropriation—Inventory and Other Assets
  • Fraudulent Disbursements – Billing | Payroll | Expense reimbursement

Integrating Fraud Auditing into the Internal Audit Program

  • Red flags common to various fraud schemes
  • Identifying red flags during the audit
  • Analyzing red flags for actual fraud
  • Fraud auditing vs. controls auditing

Using Data Analytics for Fraud Auditing

  • Ratios
  • Benford’s law
  • Fuzzy analysis

Prevention and Detection Programs

  • Control activities
  • Human resources
  • Anti-fraud training
  • Assessing Fraud Prevention programs
  • Continuous auditing and monitoring
  • Hotlines

Fraud Investigations and Response

  • Audit’s role in investigations
  • Identifying the barriers to effective incident response and how to avoid them
  • Obstacles and challenges in investigations
  • Fraud incident response checklists
  • Evidence and chain of custody
Duration

CPE

Delivery

Field

Level

Who Should Attend

Prerequisites

Advanced Preparation

2 Days

16

Group-Live

Auditing

Intermediate

Internal audit, operations, and accounting staff and management

Auditors with at least 2 years of experience

None