2. CPA Keller Tobias Mouko
Academic Q.
BBM –Moi University
MBA- Kenyatta University
Professional Q.
Cpa (k)
Working Experience
Lead Consultant at MOI; KSG; GGA; KIM (Mombasa)
5. Fraud Triangle….explained
Opportunity
conducive environment and this can be
tamed a bit through internal controls
Pressure
Financial pressure and sometimes pure
greed or passion
Rationalization
Justification –we all doing it, unfairness
etc
6. Todays Objectives…..
From Your Expectations…………
Highlights on forensic and investigative audit
When does an audit become a forensic audit?
How to carry out forensic investigations
Importance of forensic accounting and audit
Writing quality fraud audit reports/sample report
Practical approach to investigation (case studies)
7. Highlights on forensic audit
Forensic Audits are used to reveal the nature of
fraud, how it was executed, who was involved and
what was lost for Legal process to take effect.
Elements of Fraud are:-
1. Victims reliance on the truth of the falsehood
2. Victims right to rely on the misrepresentation
3. The victims loss as a consequence of the reliance
10. When to do a forensic audit?
Any time as per to the clients
request. Or based on the audit
report, But you should check your
capability……
Check below…
11. Who can conduct a forensic audit
Basically, one needs certain qualifications and skills
to conduct a forensic audit:-
A Bachelors degree in a relevant field
Accountancy skills –demonstrated by being a
member of ICPAK in good standing –A MUST
Auditing skills –CPA, CIA, CISA etc
TODAY –IT Skills are CRITICAL/EXPERTS
RELIANCE –must demonstrate understanding of the
technical aspects affecting the fraud.
A very good communicator –spoken and written.
Ambiguity or lack of clarity can free the criminal
12. Who can …………….
Excellent analytical and research skills
A person of great curiosity ….
A persistent investigator committed to a result
Thinks creatively, progressively, outside the box
Excellent attention to detail –anything in the data
population can be golden
A good listener and one with a good memory too –
sometimes you need to gather facts without taking
notes.
IT CAN BE VERY RISKY TOO !!
13. HOW IS FORENSIC AUDIT INVESTIGATION
CONDUCTED
Accepting the investigation
Planning the investigation
Gathering the evidence
Perform the analysis
Reporting
Court Proceedings
.
14. 1. Accepting the investigation
The firm must ascertain whether or not
they have the necessary tools, skills
and expertise to go forward with such
an investigation. They need to do an
assessment of their own training and
knowledge of fraud detection and legal
framework.
15. 2. Planning the investigation
The auditor(s) must carefully ascertain
the goal of the audit so being
conducted, and to carefully determine
the procedure to achieve it, through the
use of effective tools and techniques.
Planning also includes the identification
of the best mode to gather evidence.
16. 3. Gathering the evidence
Gathering the evidence In forensic auditing specific
procedures are carried out in order to produce
evidence. The investigators can use the following
techniques to gather evidence :
• Testing controls which identifies the weaknesses,
• Using analytical procedures to compare trends over
time
• Applying computer-assisted audit techniques,
• Discussions and interviews with employees
• Substantive techniques such as reconciliations, cash
counts and reviews of documentation.
,,,,,,,,,,,Apply the Fraud Theory Approach
17. ……..Fraud Theory Approach
a) Who might be the culprit?
b) What happened?
c) Why allegations might be true?
d) What methods were used?
e) When did the fraud happen?
f) How did the fraud happen?
g) Where is the evidence?
h) In the accounts?
i) Off-books?
j) Direct or circumstantial?
18. 4. Perform the analysis
The actual analysis performed may
involve calculating economic
damages, summarizing a large
number of transactions, tracing of
assets, present value
considerations
19. 5. Reporting
Reporting After investigating and
gathering evidence, the
investigating team is expected to
give a report of the findings of the
investigation, and also the
summary of the evidence and
conclusion about the loss suffered
due to the fraud.
20. 6. Court Proceedings
The last stage expands over
those audits that lead to legal
proceedings. The auditors are
called to the Court, and also
included in the advocacy
process.
21. Class at work….
What are the Importance Of Forensic
Audit…to the client and to the
public…..?
22. Forensic Report
Your Forensic Audit Report must be Accurate,
Complete, Relevant to and supported fully by
evidence. The report is to a client.
Importance of forensic audit reports
• Product/proof of work done
• Document for potential legal issues
• Document for decision making and action
• Marketing tool
23. Characteristics of a good forensic audit
report
1. Objective / unbiased be neutral and non-
judgmental.
2. Clear • The content of the report must be
clearly understood.
3. Thorough • Includes all information needed to
reach a conclusion.
4. Accurate • The content reflects facts as
gathered.
5. Professional • Report must be professionally
written and presented.
6. Timeliness • Issued within the expected
24. Structuring the report
1. Know all the facts
2. Know how you shall present all your information in
a clear and logical manner
3. Understand the timelines and sequence of events
4. Identify the modus operandi
5. Have a clear understanding of the
recommendations
25. Components of a good Report
1. Background
How it all began
2. Executive summary
Summarize actions and results
3. Scope
Objective
4. Approach
Method and participants
5. Findings
Results of the investigation
6. Conclusion
Wrap up investigation
7. Recommendations
Follow-up actions
8. Appendices
Exhibits and annexures
26. Case Studies
1. Guptas Vs Anastacia.
Pawn Shop theft by sneaking the pawn out of the
shop.
2. Martona Vs Mohammed
Inflated salaries
Double invoicing and payments
Over drawings..
Salary Advance diversion…
