Fraud Auditing, Detection, and Prevention Blog

Last month’s trivia questions and answers

Besides the fraud triangle, what other shapes are used to describe the theory of why people commit fraud.

 The fraud diamond and the fraud pentagon.

 In what year did Dr. Cressy publish the fraud triangle?

This is an interesting question because there seem to be conflicting thoughts on this subject. With that said, I will say the study was never published by Dr. Cressey, based on what I believe is a reliable source. This does not diminish the importance of the fraud triangle, it is just interesting trivia.

In the August blog, I provided you with a homework question.

I asked why the following fraud risk statement would not be included in the scope of your audit work:

“Payroll function causes a payroll payment to be issued in the name of an employee who is not on the human resources database.”

Since I started my career in the professional practice of audit, there has been a debate about the auditor’s responsibility for detecting fraud. For some reason, the audit profession has shied away from this responsibility. And yet, whenever an incident of fraud is detected, everyone says “where were the auditors?” Henceforth the fraud detection dilemma, auditor’s responsibility, and public expectation.

In my December 2019 blog, I provided eleven statements in the spirit of causing you to think about your audit plan and helping you create a dialog in your company about improving your ability to find fraud risk statements within your audit. In January and February and this blog, I’m delving deeper into the issues.

In my December 2019 blog, I provided eleven statements in the spirit of causing you to think about your audit plan and helping you create a dialog in your company about improving your ability to find fraud risk statements within your audit. In last month’s and this blog, I’m delving deeper into the issues.

In my December 2019 blog, I provided eleven statements in the spirit of causing you to think about your audit plan and helping you create a dialog in your company about improving your ability to find fraud risk statements within your audit. In the next four blogs, January – April, I will elaborate on them.

Over the last few weeks, I have had the pleasure of hearing from readers who have uncovered fraud schemes in their companies. This includes two chief auditors who attributed their ability to locate fraud schemes to my lectures or my fraud auditing techniques. I want to thank these individuals for contacting me. It was very kind of them.

Over the last six months, I have traveled the world talking about fraud data analytics. I want to thank everyone who has participated in the sessions. I also want to thank the hundreds of individuals who have signed up to receive our monthly blog newsletter.

One of the most popular topics on this blog has been Ghost Employees. I recently sat down for an interview on how fraud auditing can be used to uncover Ghost Employee schemes that I wanted to share with you.

At the June 2019 ACFE conference I spoke about Fraud Data Analytics (FDA): How to Locate Complex Vendor Overbilling Fraud Risk Statements. My sessions were sold out, so for those unable to hear my presentation I am writing three blogs that explain three of the four fraud risk statements I covered: Price inflation scheme: hidden entity scheme and now we will cover the pass-through scheme. The fourth fraud risk statement was explained in a blog posted on August 18, 2018.