This story is about a passthrough scheme. It is my opinion that most large companies have one of more pass-through schemes occurring. What makes it difficult to detect or prevent these schemes is that the scheme will comply with all of your controls. Your company has received the goods or services. Therefore, your ability to detect these schemes is predicated on your understanding of how these schemes occur and what they look like.
This is the second of three blogs looking at the state of the auditing profession. In the first blog, we looked at what has changed as companies have grown and gone global. In this article, we’re considering the use of words and the significance of precision.
We looked at how to create fraud risk statements using the payroll function in the last blog. In this blog, we’ll look at how to apply the fraud risk statement in a fraud audit program.
But first, the Trivia answers:
Was Christmas ever illegal?
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.
