2. Fraud Scheme Pertemuan III Matakuliah: F0184/Audit atas Kecurangan Tahun: 2007

3. Bina Nusantara Mahasiswa diharapkan mampu mengidentifikasi berbagai macam jenis kecurangan atau fraud Mahasiswa dapat melihat dan menganalisa symptom sebagai dasar untuk melakukan fraud audit Mahasiswa dapat menghubungkan antara symptom dengan hasil audit yang dilakukan Learning Outcomes 3

4. Bina Nusantara Fraud Scheme Red Flag / Symptom Threat and sources of threat Outline Materi 4

5. Fraud Scheme What is fraud scheme? Common methodology for a white collar crime Missing or weakness in controls can trigger the action for fraud scheme How the fraud is hidden usually the weak point of the fraudster’s case Bina Nusantara 5

6. Scheme by Business Process Purchasing Fictitious vendors Personal purchases Sister Company Price Markup Fictitious goods Bogus goods Accounts Payable Fictitious vendors Fictitious invoice Refund Scheme Accelerated Payment Bina Nusantara 6

7. Scheme by Business Process Payroll Fictitious employees Overtime markup Employment or manpower service Manipulation of bonus or allowance program Employee Expense Account Airline ticket Inflated meal or entertainment Other direct bill options Bina Nusantara 7

8. Scheme by Business Process Inventory Theft Product substitution Fictitious transfer Cash Lapping Kitting Skimming Bina Nusantara 8

9. Scheme by Business Process Loan or Investment Fictitious collateral Override decision process Kick back Services Non-existent services Inflated services Bina Nusantara 9

10. Financial Reporting Scheme I Earning manipulation II Earning management III Balance Sheet Manipulation Bina Nusantara 10

11. Financial Reporting Fraud Method  Overstatement of earnings  Fictitious earnings  Understatement of expenses  Overstatement of assets  Understatement of allowances for receivables  Overstatement of the value inventories by not writing down the value of obsolete goods  Overstatement of property values and creation of fictitious assets Bina Nusantara 11

12. Red Flag Red flag is a symptom that usually occur in the activities. Not every red flag must become a fraud case because red flag is a just a lead or sense that something probably goes wrong. This is become the main difference between fraud audit with other type of audit due to red flag can’t be gain by check list or documentation review only. It is an awareness in the broadest sense of many components, and an awareness of the potentially for fraud. Bina Nusantara 12

13. Fraud Auditor Function Auditor should set standard for the anti fraud activities Auditor must know the realm of fraud possibilities Auditor should know the most direct route for any investigation if the red flag occur Auditor should look at the motive and consider the environment in which the employee operates to determine if there is any possible justification Bina Nusantara 13

14. Fraud Auditor Function (Con;t) Another concern of the fraud auditor is to establish benefit and identify assets for possible recovery Fraud auditor assess investigative findings Auditor have many investigative concerns; one basic concern is opportunity Bina Nusantara 14