Learning Objectives LO1 Differentiate among frauds, errors, and illegal acts that might occur in an organization. LO2 Explain the auditing standards related.

Slides:

Advertisements

Similar presentations

Auditing the Purchasing Process

Advertisements

CHAPTER 14 AUDITING THE REVENUE CYCLE Fall 2007

Learning Objectives LO1 Differentiate among frauds, errors, and illegal acts that might occur in an organization. LO2 Explain the auditing standards related.

1 Fraud Prevention and Deterrence Pam Peters, CFE Office of Internal Audit.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except.

Analyzing and Recording Transactions Last Revised: 3/1/2011

Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fifth Edition Wild, Shaw, and Chiappetta Fifth Edition McGraw-Hill/Irwin Copyright © 2013.

6 THE AUDIT PROCESS. AUDITRESPONSIBILITIES AND OBJECTIVES AUDITRESPONSIBILITIES Audit Objective Primary objective of the audit is to express an opinion.

Learning Objectives LO1 Describe the finance and investment process: risk assessment, typical transactions, source documents, controls, and account balances.

McGraw-Hill/Irwin ©2007 by the McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 Management Fraud and Audit Risk "It takes 20 years to build a.

© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin The Accounting Cycle Reporting Financial Results Chapter 5.

Fraud Examination, 3E Chapter 11: Financial Statement Fraud COPYRIGHT © 2009 South-Western, a part of Cengage Learning.

Planning the Audit; Linking Audit Procedures to Risk

Auditing & Assurance Services, 6e

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & Simnett Slides prepared by Roger Simnett.

AUDITING CHAPTER 14 Control & Substantive Tests in Personnel & Payroll

Learning Objectives LO6 Explain the auditing standards related to external, internal, and governmental auditors’ responsibilities to detect and report.

Auditing II Unit 1 : Audit Procedures Unit 2: Audit of Limited Companies Unit 3: Audit of Government Companies.

Lecture 8 Understanding entity and its environment

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Auditing The Revenue Cycle Prepared by: Sartini, S.E., M.Sc., Akt.

© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Chapter 2 Analyzing and Recording Business Transactions.

Chapter 4 Risk Assessment.

CHAPTER 11 SUBTANTIVE AUDIT TESTING: Revenue Cycle

AUDIT RESPONSIBILITIES AND OBJECTIVES

 LO6 Audit Plan. Material Amounts  Sales  11,691,000 x 1%= $116,910 (materiality estimate)  Total Assets  8,983,000 x 1%= $89,830  The range for.

Chapter 8 Auditing for Fraud.

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 3-1 Chapter Three Risk Assessment and Materiality Chapter Three.

Chapter 07 Internal Control McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

IT Auditing & Assurance, 2e, Hall & Singleton C hapter 12: Fraud Schemes & Fraud Detection.

What Issues are Impacting Independent Experts as a Result of the Global Financial Crisis? Michael McDonald Principal, Moore Stephens Joanne Webb Forensic.

©2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley Audit Planning and Analytical Procedures Chapter 8.

Chapter 10 Identifying and preventing fraud Qiang Jiang School of Business Sichuan University, China

©2010 Prentice Hall Business Publishing, Auditing 13/e, Arens/Elder/Beasley Audit Planning and Analytical Procedures Chapter 8.

AUDITING THE REVENUE CYCLE AND RELATED ACCOUNTS

Auditing the Revenue Process

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Ensuring the Integrity of Financial Information Ensuring the Integrity of Financial Information C H A P T E R 5.

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 5-1 Chapter Five Audit Planning and Types of Audit Tests Chapter.

00 CHAPTER 1 Governance, Ethics, and Managerial Decision Making © 2009 Cengage Learning.

IT Auditing & Assurance, 2e, Hall & Singleton Chapter 12: Fraud Schemes & Fraud Detection IT Auditing & Assurance, 2e, Hall & Singleton.

Forensic and Investigative Accounting Chapter 3 Fraudulent Financial Reporting © 2007 CCH. All Rights Reserved W. Peterson Ave. Chicago, IL

Learning Objectives LO1 Differentiate among frauds, errors, and illegal acts that might occur in an organization. LO2 Explain the auditing standards related.

Fraud Examination, 3E Chapter 13: Liability, Asset, and Inadequate Disclosure Frauds COPYRIGHT © 2009 South-Western, a part of Cengage Learning.

REVENUE RELATED FRAUD SCHEMES. What are the most common accounts manipulated w hen perpetrating financial statement fraud ?

Chapter 2 : Objectives of Auditing T.Y. B com (Honours) Academic Year : Trimester : V.

Learning Objectives LO5 Document an accounting system to identify key controls and weaknesses in order to assess control risk. LO6 Write key control tests.

Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fourth Edition Wild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011.

Chapter 10 Auditing the Revenue Process McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 14 Internal Control, Corporate Governance, and Ethics.

©2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley Audit of the Sales and Collection Cycle: Tests of Controls and Substantive.

Error & Fraud True & Fair Materiality Lecture 2. Objectives What is Fraud What is error What is an Illegal Act Reasons and Circumstances of Errors Types.

Fraud Examination, 3E Chapter 16: Bankruptcy, Divorce and Tax Fraud COPYRIGHT © 2009 South-Western, a part of Cengage Learning.

SAS 99: Consideration of Fraud in a Financial Statement Audit.

1. F1 Section D: Specific functions of accounting & internal financial control D1. Accounting & finance functions within business D3. Internal financial.

Fraud Risk Assessment. Definitions Related To Fraud Fraud is knowingly making material misrepresentations of fact, with the intent of inducing someone.

F8: Audit and Assurance. 2 Designed to give you knowledge and application of: Section A: Audit Framework and Regulation Section B: Internal audit Section.

F1 Fraud and fraudulent behaviour and their prevention in business.

©2010 Prentice Hall Business Publishing, Auditing 13/e, Arens/Elder/Beasley Audit Planning and Analytical Procedures Chapter 8.

Auditing Concepts.

Auditing The Revenue Cycle

Management Fraud and Audit Risk

Chapter 15 Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders′ Equity, and Income Statement Accounts McGraw-Hill/Irwin Copyright.

Revenue and Collection Cycle

Audit Planning and Analytical Procedures

Chapter 13: Liability, Asset, and Inadequate Disclosure Frauds

AU-C Section 240 Consideration of fraud in a financial statement

Chapter 12: Fraud Schemes & Fraud Detection

UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT Topic 5.

Presentation transcript:

Learning Objectives LO1 Differentiate among frauds, errors, and illegal acts that might occur in an organization. LO2 Explain the auditing standards related to external, internal, and governmental auditors’ responsibilities to detect and report frauds, errors, and illegal acts. LO3 Outline some of the conditions that lead to frauds. LO4 Explain the audit procedures for detecting common employee fraud schemes. LO5 Explain the audit procedures for detecting common fraudulent financial reporting. LO6 Describe documents that auditors use for fraud risk assessment and detection. 1

Fraudulent Financial Reporting by Management Fraud that affects financial statements and causes them to be materially misleading often arises from the perceived need to “get through a difficult period.” LO5 2

Fraudulent Financial Reporting by Management Frauds have often accompanied the following conditions and circumstances:  high debt  unfavourable industry conditions  excess capacity  profit squeeze  strong foreign competition  lack of working capital  rapid expansion  product obsolescence  slow customer collections  related-party transactions LO5 3

Fraudulent Financial Reporting by Management Companies create financial statements that are materially misleading by either (1) overstating revenues and assets, (2) understating expenses and liabilities, or (3) giving disclosures that are misleading or that omit important information. LO5 4

Fraudulent Financial Reporting by Management  Many frauds involve improper recognition of assets or a “dangling debit,” which is an asset amount that is investigated and found to be false or questionable.  A mechanism that management can use for manipulating financial statements involves making false journal entries at the time of closing the books for year-end. LO5 5

Fraudulent Financial Reporting by Management A client’s far-removed illegal acts may cause financial misstatements, and external auditors should be aware of possible indications of them:  unauthorized transactions  government investigations  regulatory reports of violations  payments to consultants, affiliates, and employees for unspecified services  excessive sales commissions and agent’s fees  unusually large cash payments  unexplained payments to government officials  failure to file tax returns or pay duties and fees LO5 6