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The Fraud Audit: Responding to the Risk of Fraud in Core Business Systems

Book Description

Essential guidance for creation of an effective fraud audit program in core business systems

The Association of Certified Fraud Examiners has reported that U.S. businesses lose up to $4 billion annually due to fraud and abuse. Discover fraud within your business before yours becomes another business fraud statistic. The Fraud Audit provides a proven fraud methodology that allows auditors to discover fraud versus investigating it.

  • Explains how to create a fraud audit program

  • Shows auditors how to locate fraud through the use of data mining

  • Focuses on a proven methodology that has actually detected fraudulent transactions

  • Take a look inside for essential guidance for fraud discovery within specific corporate F&A functions, such as disbursement, procurement, payroll, revenue misstatement, inventory, journal entries, and management override.

    Table of Contents

    1. Cover
    2. Title Page
    3. Copyright
    4. Dedication
    5. Preface
    6. Chapter 1: What Is a Fraud Audit?
      1. Why Respond to Fraud Risk?
      2. The Fraud Paradigm
      3. Fraud Auditing
      4. Fraud Defined
      5. The Fraud Triangle
      6. Responses to the Risk of Fraud
      7. Summary
    7. Chapter 2: Professional Standards
      1. Overview
      2. Fraud Audit Standards
      3. Summary
    8. Chapter 3: Fraud Scenarios
      1. Key Definitions and Terms
      2. Fraud Risk Structure
      3. Classifying Fraud
      4. Identifying Fraud Scenarios
      5. Fraud Audit Considerations
      6. Summary
    9. Chapter 4: Brainstorming: The Implementation of Professional Standards
      1. What Is Brainstorming?
      2. When to Brainstorm
      3. Summary
    10. Chapter 5: Assessment of Fraud Likelihood
      1. Preparing a Fraud Risk Assessment
      2. Summary
    11. Chapter 6: Building the Fraud Audit Program
      1. Traditional Audit versus the Fraud Audit
      2. Responding to the Risk of Fraud
      3. A Fraud Audit Program
      4. Testing Procedures
      5. Fraud Concealment Effect on the Audit Response
      6. Audit Evidence Issues
      7. Fraud Scenario Examples
      8. Summary
    12. Chapter 7: Data Mining for Fraud
      1. The Art and Science of Data Mining
      2. Strategies for Data Mining
      3. Limitations of Data Mining
      4. Summary
    13. Chapter 8: Fraud Audit Procedures
      1. Basis of Fraud Audit Procedures
      2. Levels of Fraud Audit Procedures
      3. Design of Fraud Audit Procedures
      4. Summary
    14. Chapter 9: Document Analysis
      1. Document Analysis and the Fraud Audit
      2. Levels of Document Examination
      3. Document Red Flags
      4. Brainstorming Sessions and Document Red Flags
      5. The Fraud Audit Program and Document Red Flags
      6. Summary
    15. Chapter 10: Disbursement Fraud
      1. Fraud Risk Structure
      2. Audit Approaches
      3. Summary
    16. Chapter 11: Procurement Fraud
      1. Fraud Risk Structure
      2. Audit Procedures
      3. Summary
    17. Chapter 12: Payroll Fraud
      1. Fraud Risk Structure
      2. Audit Procedures
      3. Summary
    18. Chapter 13: Revenue Misstatement
      1. Fraud Risk Structure
      2. Audit Approach
      3. Summary
    19. Chapter 14: Inventory Fraud
      1. Fraud Risk Structure
      2. Audit Procedures
      3. Summary
    20. Chapter 15: Journal Entry Fraud
      1. Fraud Risk Structure
      2. Audit Procedures
      3. Summary
    21. Chapter 16: Program Management Fraud
      1. Fraud Risk Structure
      2. Audit Approach
      3. Summary
    22. Chapter 17: Quantifying Fraud
      1. Conveying the Impact to Management
      2. Role of Evidence in Calculating a Fraud Loss
      3. Impact on the Fraud Audit
      4. Options for Management
      5. Case Studies
      6. Summary
    23. Appendixes
      1. Appendix A: Fraud Audit Program: Payroll
        1. Background
        2. Key Terms
        3. Fraud Scheme Structure
        4. Overall Audit Approach
        5. Red Flags
        6. Data Mining
        7. Fraud Audit Procedures
      2. Appendix B: Fraud Audit Program: Disbursements
        1. Red Flags
        2. Fraud Audit Procedures
      3. Appendix C: Fraud Audit Program: Procurement
        1. Key Terms
        2. Fraud Scheme Structure
        3. Overall Audit Approach
        4. Red Flags
        5. Cost Mischarging
        6. Fraud Audit Procedures
      4. Appendix D: Fraud Audit Program: Inventory
        1. Inventory Concealment Techniques
      5. Appendix E: Fraud Audit Planning Program: Revenue Recognition
        1. Fraud Risk Structure: Revenue Recognition
        2. Fraud Concealment Strategy
        3. Planning the Revenue Audit
        4. Audit Areas for False Billing Schemes
        5. Audit Areas for Improper Recognition Schemes
      6. Appendix F: Checklist of Inherent Scheme Structure
        1. Entity Structure
        2. Disbursement Chapter
        3. Payroll Chapter
        4. Procurement Schemes
      7. Appendix G: Fraud Audit Matrix
    24. About the Author
    25. Index