Audit Kecurangan

1. Audit Kecurangan Chapter 11

2. Learning Objective 1 Tentukan kecurangan dan membedakanantara kecuranganpelaporan keuangandan penyalahgunaanaset.

3. Types of Fraud KecuranganPelaporanKeuangan Penyalahgunaan Aset

4. Learning Objective 2 Describe the fraud triangle and identify conditions for fraud.

5. SegitigaKecurangan Insentif / Tekanan Peluang Sikap / Rasionalisasi

6. Examples of Risks Factors for Fraudulent Reporting Incentives/Pressures Financial stability or profitability is threatened by economic, industry, or entity operating conditions. Excessive pressure exists for management to meet debt requirements. Personal net worth is materially threatened.

7. Examples of Risks Factors for Fraudulent Reporting Opportunities There are significant accounting estimates that are difficult to verify. There is ineffective oversight over financial reporting. High turnover or ineffective accounting internal audit, or information technology staff exists.

8. Examples of Risks Factors for Fraudulent Reporting Attitudes/Rationalization Inappropriate or inefficient communication and support of the entity’s values is evident. A history of violations of laws is known. Management has a practice of making overly aggressive or unrealistic forecasts.

9. Examples of Risks Factors for Misappropriation of Assets Incentives/Pressures Personal financial obligations create pressure to misappropriate assets. Adverse relationships between management and employees motivate employees to misappropriate assets.

10. Examples of Risks Factors for Misappropriation of Assets Opportunities There is a presence of large amounts of cash on hand or inventory items. There is an inadequate internal control over assets.

11. Examples of Risks Factors for Misappropriation of Assets Attitudes/Rationalization Disregard for the need to monitor or reduce risk of misappropriating assets exists. There is a disregard for internal controls.

12. Learning Objective 3 Understand the auditor’s responsibility for assessing the risk of fraud and detecting material misstatements due to fraud.

13. Assessing the Risk of Fraud SAS 99 provides guidance to auditors in assessing the risk of fraud.

14. Professional Skepticism SAS 1 states that, in exercising professional skepticism, an auditor “neither assumes that management is dishonest nor assumes unquestionedhonesty.”

15. Communication among audit team Inquiries of management Risk factors Analytical procedures Other information Identified risks of material misstatements due to fraud Sources of Information Gathered to Assess Fraud Risks

16. Documenting Fraud Assessment Discussion Procedures Specific risks Reasons Results Other conditions Nature of communications

17. Learning Objective 4 Identify corporate governance and other control environment factors that reduce fraud risks.

18. Corporate Governance Oversightto Reduce Fraud Risks 1. Create and maintain a culture of honesty and high ethics. 2. Evaluate fraud risks and implement programs and controls to mitigate identified fraud risks. 3. Develop an appropriate fraud oversight process.

19. Example Elements for a Code of Conduct Organizational code of conduct General employee conduct Conflicts of interest Outside activities, employment, and directorships

20. Example Elements for a Code of Conduct Relationships with clients and suppliers Gifts, entertainment, and favors Kickbacks and secret commissions Organization funds and other assets

21. Example Elements for a Code of Conduct Organization records and communications Dealing with outside people and organizations Prompt communications Privacy and confidentiality

22. Collusion between employees and third parties 48 31 33 Inadequate internal controls 39 58 59 Management override of internal controls 31 36 36 2003 1998 1994 Organizational Factors Contributing to Risk of Fraud

23. Organizational Factors Contributing to Risk of Fraud Collusion between employees and management 15 19 23 Lack of control over management be directors 12 11 6 Ineffective or nonexistent ethics or compliance program 10 8 7 2003 1998 1994

24. Learning Objective 5 Develop responses to identified fraud risks.

25. Responding to the Risk of Fraud Change the overall conduct of the audit to respond to identified fraud risks. Design and perform audit procedures to address identified risks. Design and perform procedures to address the risk of management override of controls.

26. Learning Objective 6 Recognize specific fraud risk areas and develop procedures to detect fraud.

27. Theft of assets 49 22 Check fraud 40 26 Expense account abuse 36 13 Credit card fraud 20 13 Payroll fraud 12 3 2003 1998 Rates of Fraud Occurrence

28. Rates of Fraud Occurrence Conflict of interest 12 9 Inventory theft 11 11 Kickbacks 9 6 Financial reporting fraud 7 3 2003 1998

29. Specific Fraud Risk Areas Revenue and accounts receivable fraud risks Inventory fraud risks Purchases and accounts payable fraud risks Other areas of fraud risk

30. Learning Objective 7 Understand interview techniques and other activities after fraud is suspected.

31. Internal controls 77% 51% 52% Internal audit 65% 43% 47% Notification by employee 63% 58% 51% 2003 1998 1994 Methods of Uncovering Fraud

32. Methods of Uncovering Fraud Accident 54% 37% 28% Anonymous tip 41% 35% 26% Notification by customer 34% 41% 34% 2003 1998 1994

33. Methods of Uncovering Fraud Notification by regulatory or law enforcement agency 19% 16% 8% Notification by vendor 16% 11% 15% External audit 12% 4% 5% 2003 1998 1994

34. Responding to Misstatements that May be the Result of Fraud When fraud is suspected, the auditor gathers additional information to determine whether fraud actually exists.

35. Types of Inquiry Techniques Informational inquiry Assessment inquiry Interrogative inquiry

36. Types of Inquiry Techniques Evaluating responses Listening techniques Observing behavioral cues

37. End of Chapter 11