SAS 122, AU 240, Consideration of Fraud in A Financial Audit state that auditors fail to detect fraud for two reasons. One, they haven’t been trained to look for it and two, they don’t know what it looks like. I would like to add a third reason: they don’t want to find fraud because it causes problems for the audit. This session is designed to familiarize auditors with the many faces of fraud; where and how to look for them and what to do if you think you have found fraud. Not everyone is able to recognize fraud. During this program, the attributes a fraud auditor (frauditor) will be discussed. In order to recognize fraud, an auditor must understand their client’s operation. What is an indicator in one client’s operation may be business as usual in another, and you have to know the difference. After viewing this program, chances are you will never look at your client the same way!
Learning Objectives
Explain common reasons auditors fail to detect fraud during financial audits. Describe the various forms and characteristics of fraud that may occur in organizations. Recognize indicators and warning signs of potential fraud within audit engagements. Apply practical techniques to identify fraud risks during the audit process. Evaluate client operations and business activities to distinguish normal practices from suspicious activity. Determine appropriate steps to take when potential fraud is identified during an audit.
Major Topics
Fraud Detection Challenges Fraud Characteristics Fraud Indicators Audit Responsibilities Fraud Risk Recognition Responding to Suspected Fraud
