Audit Fraud & error p7

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  • Audit Fraud & error p7

    1. 1. Fraud v Error
    2. 2. Fraud v Error Intentional
    3. 3. Fraud v ErrorIntentional
    4. 4. Fraud v ErrorIntentional Misinterpretation
    5. 5. Fraud v ErrorIntentional Misinterpretation
    6. 6. Fraud v ErrorIntentional Misinterpretation Incorrect Accounting
    7. 7. Fraud v ErrorIntentional Misinterpretation Incorrect Accounting
    8. 8. Fraud v Error Intentional Misinterpretation Incorrect AccountingThere may be requirements to report suspicions of fraud, but not error
    9. 9. Management v Auditor
    10. 10. Management v Auditor Prepare T&F
    11. 11. Management v AuditorPrepare T&F
    12. 12. Management v AuditorPrepare T&F Prevent & Detect Fraud
    13. 13. Management v AuditorPrepare T&F Prevent & Detect Fraud
    14. 14. Management v AuditorPrepare T&F Prevent & Detect Fraud Internal Controls
    15. 15. Management v AuditorPrepare T&F Prevent & Detect Fraud Internal Controls Good Corporate Governance
    16. 16. Management v Auditor
    17. 17. Management v Auditor Report on T&F
    18. 18. Management v Auditor Report on T&F
    19. 19. Management v Auditor Report on T&FReasonable Assurance Fraud & ERROR
    20. 20. Management v Auditor Report on T&F Reasonable Assurance Fraud & ERROR
    21. 21. Management v Auditor Report on T&F Reasonable Assurance Fraud & ERRORPrimary F&E responsibility lies with management
    22. 22. Management v Auditor Report on T&F Reasonable Assurance Fraud & ERROR Primary F&E responsibility lies with managementconsider the risk of material misstatement
    23. 23. Management v Auditor
    24. 24. Management v Auditor Reduce fraud opportunities
    25. 25. Management v Auditor Reduce fraud opportunities Establish a culture where no fraud
    26. 26. Management v Auditor Reduce fraud opportunities Establish a culture where no fraud due to the likelihood of detection
    27. 27. Professional Scepticism
    28. 28. Professional ScepticismDiscuss fraud within specific characteristics of the audit & potential effect on FS
    29. 29. Professional ScepticismDiscuss fraud within specific characteristics of the audit & potential effect on FS
    30. 30. Professional ScepticismDiscuss fraud within specific characteristics of the audit & potential effect on FSTalk to management about controls to detect or prevent fraud
    31. 31. Professional ScepticismDiscuss fraud within specific characteristics of the audit & potential effect on FSTalk to management about controls to detect or prevent fraudObtain evidence that fraud has not occurred or detected and corrected
    32. 32. Fraud/Error is Suspected?
    33. 33. Fraud/Error is Suspected?
    34. 34. Fraud/Error is Suspected? Effect on FS?
    35. 35. Fraud/Error is Suspected? Effect on FS?
    36. 36. Fraud/Error is Suspected? Effect on FS? Document in Audit files
    37. 37. Fraud/Error is Suspected? Effect on FS? Document in Audit files
    38. 38. Fraud/Error is Suspected? Effect on FS? Additional Document in Testing? Audit files
    39. 39. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Additional Document in Testing? Audit files
    40. 40. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Additional Document in Testing? Audit files
    41. 41. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files
    42. 42. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files
    43. 43. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss withManagement
    44. 44. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss withManagementTell them to get legaladvice if fraud is suspected
    45. 45. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss withManagementTell them to get legaladvice if fraud is suspected
    46. 46. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss with If ManagementManagementTell them to get Suspected? legaladvice if fraud is suspected
    47. 47. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss with If ManagementManagementTell them to get Suspected? legal Get legal advice or rarely resignadvice if fraud is suspected
    48. 48. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit filesDiscuss with If ManagementManagementTell them to get Suspected? legal Get legal advice or rarely resignadvice if fraud is suspected
    49. 49. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files ConsiderDiscuss with If Management ReportManagementTell them to get Suspected? Impact legal Get legal advice or rarely resignadvice if fraud is suspected
    50. 50. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files ConsiderDiscuss with If Management ReportManagementTell them to get Suspected? Impact legal Get legal advice or rarely resignadvice if fraud is suspected
    51. 51. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files ConsiderDiscuss with If Management ReportManagementTell them to get Suspected? Impact legal Get legal advice or rarely resignadvice if fraud is suspected Report to Authorities?
    52. 52. Fraud/Error is Suspected? Effect on FS? Extent of misstatement Effect on Additional Document in Risk? Testing? Audit files ConsiderDiscuss with If Management ReportManagementTell them to get Suspected? Impact legal Get legal advice or rarely resignadvice if fraud is suspected Report to Authorities? Consider Confidentiality
    53. 53. The Auditor - Criminal Liability
    54. 54. The Auditor - Criminal LiabilityAccepting appointment without being qualified
    55. 55. The Auditor - Criminal LiabilityAccepting appointment without being qualified Being involved with fraud
    56. 56. The Auditor - Criminal LiabilityAccepting appointment without being qualified Being involved with fraud Insider Dealing
    57. 57. The Auditor - Criminal LiabilityAccepting appointment without being qualified Being involved with fraud Insider Dealing Money Laundering
    58. 58. The Auditor - Civil Liability
    59. 59. The Auditor - Civil Liability Negligent (careless) auditing
    60. 60. The Auditor - Civil Liability Negligent (careless) auditingSued by Client company under contract law
    61. 61. The Auditor - Civil Liability Negligent (careless) auditingSued by Client company under contract law Sued by banks etc under negligence
    62. 62. The Auditor - Duty of skill & Care
    63. 63. The Auditor - Duty of skill & Care Depends on the circumstance
    64. 64. The Auditor - Duty of skill & Care Depends on the circumstanceeg. Accepting the word of management after suspicion is aroused
    65. 65. The Auditor - Duty of skill & Care Depends on the circumstanceeg. Accepting the word of management after suspicion is aroused Follow ISAs and show this in working papers
    66. 66. The Auditor - Professional competence
    67. 67. The Auditor - Professional competenceAchieve, and maintain, professional knowledge
    68. 68. The Auditor - Professional competence Achieve, and maintain, professional knowledgeeg. Formal & Informal training + experience
    69. 69. The Auditor - Professional competence Achieve, and maintain, professional knowledgeeg. Formal & Informal training + experience Awareness of general business developments, such as dropbox and e-commerce
    70. 70. The Auditor - Due care
    71. 71. The Auditor - Due careActing diligently in accordance with technical and professional standards
    72. 72. The Auditor - Due care Acting diligently in accordance with technical and professional standardsmeans applying knowledge minimising the chance of mistakes being made
    73. 73. The Auditor - Due care Acting diligently in accordance with technical and professional standardsmeans applying knowledge minimising the chance of mistakes being made Enough time to complete work with due care Staff fully understand the objectives
    74. 74. The Auditor - Negligence - A Civil Wrong
    75. 75. The Auditor - Negligence - A Civil Wrong Duty of Care
    76. 76. The Auditor - Negligence - A Civil Wrong Duty of Care Duty is broken
    77. 77. The Auditor - Negligence - A Civil Wrong Duty of Care Duty is broken Damage results
    78. 78. The Auditor - Negligence - A Civil Wrong Duty of Care Duty is broken Damage resultsThe auditor does not exist to aid investment decisions, unless verbal assurances given
    79. 79. Fraudulent Financial Reporting
    80. 80. Fraudulent Financial Reporting IntentionalMisstatement!
    81. 81. Fraudulent Financial Reporting
    82. 82. Fraudulent Financial Reporting Manipulation
    83. 83. Fraudulent Financial Reporting Manipulation Misrepresentation
    84. 84. Fraudulent Financial Reporting Manipulation Misrepresentation Misapplication
    85. 85. Fraudulent Financial Reporting Manipulation Misrepresentation Misapplication Earnings Management

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