Fraud Audit Case Study

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Fraud Risk Assessment
1. Does the company have formal and regularly scheduled processes to perform fraud risk assessments?
2. Are appropriate personnel involved in the fraud risk assessments?
3. Are fraud risk assessments performed at all levels of the company (ie, at entity level, significant locations or business units, significant account balance or major process level)?
4. Does the fraud risk assessment include consideration of internal and external risk factors (including pressures or incentives, rationalizations or attitudes, and opportunities)?
5. Does the fraud risk assessment also include the identification and evaluation of past occurrences and allegations of fraud within the company and industry? Does it include the evaluations …show more content…

Is the fraud risk assessment designed and operating effectively?
Control Environment
1. Does the company maintain a proper tone at the top? Does the management assess the tone of the organization to determine if the culture encourages ethical behavior, consultation, and open communication?
2. Do the audit committee and the board of directors have sufficient oversight of management's antifraud programs and controls? 3. Does the internal audit function have sufficient involvement in antifraud programs and controls, including monitoring of the effectiveness of antifraud programs and controls, given the size and complexity of the organization? Does the internal audit function report directly to the audit committee? 4. Does the company have a published code of ethics made available to all personnel and does management require employees to confirm that they accept and agree to follow it? Does the frequency of exceptions undermine the code's effectiveness? Does the code of honour comply will all applicable rules and regulations? 5. Does the company have an whistleblower hotline with adequate procedures to handle anonymous complaints and to accept confidential submission of concerns about questionable ac-counting, internal accounting control, or auditing matters? Are tips and whistleblower complaints investigated and resolved in a timely …show more content…

Does the company have formal hiring and promotion standards, including background checks for those employees with influence over financial reporting or involved in the preparation of the financial statements?
7. Does the company have formal and effective training for employees and new hires on issues of fraud, ethics, and the code of ethics/conduct?
8. Does the company respond in a timely and appropriate manner to significant control deficiencies, allegations or concerns of fraud, and violations of the code of ethics/conduct?
9. Does management assess the design and operating effectiveness of the control environment?
10. Does management adequately document its opinions regarding the design and operating effectiveness of the control environment?
11. Is the control environment designed and operating effectively?
Antifraud Control Activities
1. Does management design and implement preventative and detective controls (preventative controls are designed to stop fraud from occurring and detective controls are designed to identify the fraud if it occurs)? 2. Does the company have controls that restrain the misappropriation of company assets that could result in a material misstatement of the financial

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