Integrating Fraud Testing Into the Audit Program

There are similarities between the traditional audit and the fraud audit, as they both involve the exercise of auditing. However, there are several key differences between them that are important to recognize. 

Traditional Audit & Fraud Audit Similarities

  • The four phases of an audit are planning, sampling, testing, and reporting.
  • The use of an audit program to document audit procedures performed on internal controls or key financial statement assertions.
  • The examination of documents and records to formulate opinions.
  • The issuance of a report containing opinions based on the objective of the audit.

Traditional Audit & Fraud Audit Differences

The fraud audit differs from the traditional audit in several key aspects; some may be considered structural design differences, while others may be thought of as nuances to the traditional audit. Specifically, the differences are as follows:

  • The fraud audit program is designed to uncover fraud versus providing assurance that internal controls can effectively mitigate fraud occurrence in core business systems.
  • While the four audit phases are the same for both, the methodology in each phase is different, the fraud risk assessment being the key difference. With a traditional audit, the assessment is based on linking the internal controls to fraud risk, while with the fraud audit assessment directly correlates to building the fraud audit program.
  • The audit program must be calibrated to the sophistication of concealment model.
  • The sampling performed for a fraud audit is the most extensive process and typically is performed by the most senior auditor of the fraud audit team. The sampling is based on discovery sampling versus a random selection process.
  • The fraud audit focuses on the authenticity of the assertions versus the evidence of an assertion.
  • The fraud audit relies on evidence external to the organization, whereas traditional auditing tends to rely on internal evidence.
  • The fraud audit opinion opines on the credible evidence associated with the existence of fraud scenarios included in the fraud scope.

These seminars on integrating fraud testing into the audit program can help your team bridge the gap between the traditional audit and a fraud audit to minimize risk for companies. 

Seminar Learning Modules & Objectives

Course 1: Understanding the Sophistication of Concealment on Fraud Detection

An important part of detecting and determining fraud depends on concealment. This course will cover:

  • What is fraud concealment
  • Understanding the sophistication of concealment model
  • How concealment correlates to criminal intent
  • Learn how to integrate fraud concealment into the audit program
  • Learn how to calibrate the audit program to the level of fraud sophistication

CPE Hours: 3

Lecture time: 2 hours

Practical exercise time: 1 hour

Advanced Preparation: None

Prerequisite:  Fraud Risk curriculum

Learning level: Basic

Field: Auditing

Delivery Method: Group Live

Course 2: Integrating Fraud into the Audit Program
This course covers:
  • Fraud auditing vs. internal control testing
  • How fraud testing differs from fraud investigation
  • Understanding how perpetrators conceal fraud scenarios
  • How to conduct an audit designed to detect fraud scenarios

CPE Hours: 3

Lecture time: 2 hours

Practical exercise time: 1 hour

Advanced Preparation: None

Prerequisite: Fraud Risk curriculum and Understanding the Sophistication of Concealment on Fraud Detection learning module

Learning level: Basic

Field: Auditing

Delivery Method: Group Live

Course 3: Red Flag Approach for Internal Control Testing
This course covers:
  • What is a fraud red flag
  • Understanding the red flag audit approach
  • Documenting the red flags into your work papers
  • Testing and evaluating the design of anti-fraud controls
  • Analyzing red flags for actual fraud

CPE Hours: 3

Lecture time: 2 hours

Practical exercise time: 1 hour

Advanced Preparation: None

Prerequisite: Fraud Risk curriculum and Understanding the Sophistication of Concealment on Fraud Detection learning module

Learning level: Intermediate

Field: Auditing

Delivery Method: Group Live

Course 4: Fraud Testing Approach
This course covers:
  • What is a fraud test
  • Using the fraud authenticity approach
  • Correlating audit evidence rules to fraud testing
  • Building the fraud sample
  • Designing a fraud test for the fraud scenario
  • Analyzing audit evidence for actual fraud

 CPE Hours: 3.0

Lecture time: 2 hours

Practical exercise time: 1 hour

Advanced Preparation: None

Prerequisite: Fraud Risk curriculum and Understanding the Sophistication of Concealment on Fraud Detection learning module

Learning level: Intermediate

Field: Auditing

Delivery Method: Group Live

Other Fraud Training Curriculum:

Fraud Auditing, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education (CPE) on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.  

Book Fraud Training for Your Team