Corruption is a form of dishonesty or criminal offense or undertaken by a person. The presentation is about CAG’s Regulations and Standing orders in relation to cases of Fraud and Corruption Prepared by Pramod Kumar Jain,
Faculty in RTI Jaipur for information of user
This lecture is a part of the lecture series intended to help advocates from Tamil Nadu write the All India Bar Exam XII (2018). The lecture deals with the structure of the Indian Evidence Act, 1872 and provides tips on how to approach the questions in the exam on the said Act. The audio of this lecture can be downloaded at:https://goo.gl/8wGEzo (SoundCloud link) and the video can be viewed at: (YouTube link)
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
Verification and valuation of assets presentation by Syed Ali Gohar Shah 21/1...Syed Ali Gohar Shah Shah
This presentation was assigned by Respected Teacher SIR ATTA HUSSAIN SHAH and was presented by SYED ALI GOHAR SHAH In SINDH UNIVERSITY MIRPURKHAS CAMPUS. On the date of Monday 21/10/2019.
This lecture is a part of the lecture series intended to help advocates from Tamil Nadu write the All India Bar Exam XII (2018). The lecture deals with the structure of the Indian Evidence Act, 1872 and provides tips on how to approach the questions in the exam on the said Act. The audio of this lecture can be downloaded at:https://goo.gl/8wGEzo (SoundCloud link) and the video can be viewed at: (YouTube link)
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
Verification and valuation of assets presentation by Syed Ali Gohar Shah 21/1...Syed Ali Gohar Shah Shah
This presentation was assigned by Respected Teacher SIR ATTA HUSSAIN SHAH and was presented by SYED ALI GOHAR SHAH In SINDH UNIVERSITY MIRPURKHAS CAMPUS. On the date of Monday 21/10/2019.
OBJECTIVE
The place of supply in GST determines the taxable jurisdiction where the tax should reach and ascertains whether the supply is inter-state supply or intra-state supply. This webinar shall deal with the place of supply with regards to various types of goods and services. It shall also throw some light on the valuation criteria in certain cases.
The presentation seeks to provide deep insight into the Pre-Packaged Insolvency Resolution Process introduced to the Insolvency and Bankruptcy Code, 2016 by way of enactment of Insolvency and Bankruptcy (Amendment) Ordinance, 2021 under Part II Chapter III-A of the Code.
Framework of Goods and Service Tax Act in India sandesh mundra
Efforts are made to show the present structure of VAT, Service Tax and CST in brief. Present Constitutional framework is added along with constitutional amendment required to be made for introducing GST. GST's proposed structure, components, exemptions, rates of tax, exclusions, issue of composite supplies, legislative powers of central and state government, structure of GST council, scope of work of council and suggestions for implementation is added to give a concise picture.
Judgments on section 9 of the Arbitration and Conciliation Act, 1996Legal
This is a compilation of Judgments delivered by Hon'ble Supreme Court and Hon'ble High Courts on section 9 of the Arbitration and Conciliation Act, 1996
OBJECTIVE
The place of supply in GST determines the taxable jurisdiction where the tax should reach and ascertains whether the supply is inter-state supply or intra-state supply. This webinar shall deal with the place of supply with regards to various types of goods and services. It shall also throw some light on the valuation criteria in certain cases.
The presentation seeks to provide deep insight into the Pre-Packaged Insolvency Resolution Process introduced to the Insolvency and Bankruptcy Code, 2016 by way of enactment of Insolvency and Bankruptcy (Amendment) Ordinance, 2021 under Part II Chapter III-A of the Code.
Framework of Goods and Service Tax Act in India sandesh mundra
Efforts are made to show the present structure of VAT, Service Tax and CST in brief. Present Constitutional framework is added along with constitutional amendment required to be made for introducing GST. GST's proposed structure, components, exemptions, rates of tax, exclusions, issue of composite supplies, legislative powers of central and state government, structure of GST council, scope of work of council and suggestions for implementation is added to give a concise picture.
Judgments on section 9 of the Arbitration and Conciliation Act, 1996Legal
This is a compilation of Judgments delivered by Hon'ble Supreme Court and Hon'ble High Courts on section 9 of the Arbitration and Conciliation Act, 1996
BCom Auditing and Corporate Governance Notes-1.pdfMystatus4
In this Slides we have Provided BCom Auditing and Corporate Governance most important Questions and Answers with some important Points and notes which helps you to score good marks.
If you want more information regarding this topic then please visit our sites https://www.thetreasurenotes.in and https://www.proedunotes.in
Fraudulent financial reporting generally involves the recording of f.pdfanandshingavi23
Fraudulent financial reporting generally involves the recording of fraudulent journal entries,
particularly those involving post-closing adjustments and other types of nonstandard journal
entries.Auditors’ responsibility with respect to fraud, as presented in AU Section 316,
Consideration of Fraud in a Financial Statement Audit, requires auditors to presume that the risk
of management override of controls is always present and to test journal entries and other
adjustments for indications of possible material misstatements due to fraud.
Describes fraud and its characteristics.
SAS 99 defines fraud as an intentional act that results in a material misstatement that are done
financial statements. There are two types of fraud considered: misstatements arising from
fraudulent financial reporting and misstatements arising from misappropriation of assets . The
standard describes the fraud triangle. Generally, the three ‘fraud triangle’ conditions are present
when fraud occurs. First, there is an incentive or pressure that provides a reason to commit fraud.
Second, there is an opportunity for fraud to be perpetrated (e.g. absence of controls, ineffective
controls, or the ability of management to override controls.) Third, the individuals committing
the fraud possess an attitude that enables them to rationalize the fraud.
Requires sessions to discuss how and where the entity’s financial statements might be
susceptible to material misstatement due to fraud.
This requirement is a new concept in audit standards and it has two primary objectives. The first
objective is so the engagement team will have an opportunity for the seasoned team members to
share their experiences with the client and how a fraud might be perpetrated and concealed. The
second objective is to set the proper “tone at the top” for conducting the engagement. The
brainstorming session is to be conducted in a manner that models the proper degree of
professional skepticism and sets the culture for the entire audit.
The following steps involved in testing journal entries and other adjustments are addressed in
this Practice Aid and generally occur in the following order:
Step 1: Consider the risks of material misstatement due to fraud identified in planning the
engagement and their effect on the nature and extent of journal entry testing.
Step 2: Obtain an understanding of the entity’s financial reporting processes and the controls
over journal entries and other adjustments.
Step 3: Perform audit procedures to determine the completeness of the population of journal
entries and other adjustments.
Step 4: Identify and select journal entries and other adjustments for testing.
Step 5: Perform journal entry audit procedures, gather sufficient evidence, and document results.
The auditor should gather information necessary to identify risks of material misstatement due to
fraud by the following
SAS 99 requires auditors to ask management questions about their awareness and understanding
of fraud. Au.
HomeworkPlease read the following note on fraud to broaden your .docxadampcarr67227
Homework
Please read the following note on fraud to broaden your understanding of the topic and to guide your responses. [More guide]
Fraud
Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain (adjectival form fraudulent; to defraud is the verb). As a legal construct, fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). Defrauding people or organizations of money or valuables is the usual purpose of fraud, but it sometimes instead involves obtaining benefits without actually depriving anyone of money or valuables, such as obtaining a driver’s license by way of false statements made in an application for the same (Nigrini 2011).
Financial Statement Fraud
Financial statement fraud is one of the biggest challenges in the modern business world. This is when corporations engage in certain practices designed to hide or maneuver the accounts of a corporation to help it continue to remain attractive to investors. To counter financial statement frauds, especially in the aftermath of the Enron scandal in 2001-2002, the US Congress introduced the Sarbanes Oxley Act, the compliance with which is mandatory for US corporations. A financial statement fraud may be actionable under both the False Claims Act and the Dodd Frank Act as well. You may have suffered a financial statement fraud or may have original information about a financial statement fraud, which means that you may be able to bring either a financial statement fraud lawsuit or a whistleblower lawsuit depending on the facts peculiar to your case.
The most common occurrence of financial statement fraud is when losses are underplayed or deliberately hidden by corporations. Financial statement fraud comprises deliberate misstatements or omissions of amounts or disclosures of financial statements to deceive financial statement users, particularly investors and creditors, outright falsification, alteration, or manipulation of material financial records, supporting documents, or business transactions, material intentional omissions or misrepresentations of events, transactions, accounts, or other significant information from which financial statements are prepared, deliberate misapplication of accounting principles, policies, and procedures used to measure, recognize, report, and disclose economic events and business transactions and also intentional omissions of disclosures or presentation of inadequate disclosures regarding accounting principles and policies and related financial amounts.
There are massive issues that emanate from financial statement fraud. Financial statement fraud undermines the reliability, quality, transparency, and integrity of the financial reporting process and jeopardizes the integrity and objectivity of the auditing profession, especially auditors .
Subject Forensic AccountngAs we move forward, and computer te.pdfakilastationarrymdu
Subject \" Forensic Accountng\"
As we move forward, and computer technology improves, we will have the ability to utilize
programs to look for \"red flags\" or anomalies within a companies books. The other side of this
coin is that this technology can also be utilized to conduct fraudulent operations, and an article in
Accounting today even suggests that this will be the direction that fraud goes in 2015.
If a company is suspected of fraud, or a whistleblower comes to the SEC with information fraud
examiners will get to work! HOW an auditor investigate it.
Solution
Fraud has become very complicated in this era of technology, and increasingly difficult to detect,
especially when it is collusive in nature and committed by top management who are capable of
concealing it.
Over the last two decades, there have been developments concerning fraud which some have
seen as marking significant extension to audit responsibilities. The business community,
especially the accounting profession, has become increasingly concerned about the rise in
management fraud. Recent internal reports suggest that employee fraud is pervasive, plaguing
both large and small organization alike.
If a company is suspected of fraud or a whistle blower comes to SEC,an auditor has to conduct
thorough investigation to get the root of the fraud and carry out necessary actions accordingly.
First,we will take a look at various types of frauds that can prevail and different investigation
procedures.
TYPES OF INVESTIGATION
The forensic accountant could be asked to investigate many different types of fraud. It is useful
to categorise these types into three groups to provide an overview of the wide range of
investigations that could be carried out. The three categories of frauds are corruption, asset
misappropriation and financial statement fraud.
Corruption
There are three types of corruption fraud: conflicts of interest, bribery, and extortion. Research
shows that corruption is involved in around one third of all frauds.
Asset misappropriation
By far the most common frauds are those involving asset misappropriation, and there are many
different types of fraud which fall into this category. The common feature is the theft of cash or
other assets from the company, for example:
Financial statement fraud
This is also known as fraudulent financial reporting, and is a type of fraud that causes a material
misstatement in the financial statements. It can include deliberate falsification of accounting
records; omission of transactions, balances or disclosures from the financial statements; or the
misapplication of financial reporting standards. This is often carried out with the intention of
presenting the financial statements with a particular bias, for example concealing liabilities in
order to improve any analysis of liquidity and gearing.
CONDUCTING AN INVESTIGATION
The process of conducting a forensic investigation is, in many ways, similar to the process of
conducting an audit, but with s.
Homework guidePlease read the following note on fraud to broaden.docxadampcarr67227
Homework guide
Please read the following note on fraud to broaden your understanding of the topic and to guide your responses. [More guide]
Fraud
Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain (adjectival form fraudulent; to defraud is the verb). As a legal construct, fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). Defrauding people or organizations of money or valuables is the usual purpose of fraud, but it sometimes instead involves obtaining benefits without actually depriving anyone of money or valuables, such as obtaining a driver’s license by way of false statements made in an application for the same (Nigrini 2011).
Financial Statement Fraud
Financial statement fraud is one of the biggest challenges in the modern business world. This is when corporations engage in certain practices designed to hide or maneuver the accounts of a corporation to help it continue to remain attractive to investors. To counter financial statement frauds, especially in the aftermath of the Enron scandal in 2001-2002, the US Congress introduced the Sarbanes Oxley Act, the compliance with which is mandatory for US corporations. A financial statement fraud may be actionable under both the False Claims Act and the Dodd Frank Act as well. You may have suffered a financial statement fraud or may have original information about a financial statement fraud, which means that you may be able to bring either a financial statement fraud lawsuit or a whistleblower lawsuit depending on the facts peculiar to your case.
The most common occurrence of financial statement fraud is when losses are underplayed or deliberately hidden by corporations. Financial statement fraud comprises deliberate misstatements or omissions of amounts or disclosures of financial statements to deceive financial statement users, particularly investors and creditors, outright falsification, alteration, or manipulation of material financial records, supporting documents, or business transactions, material intentional omissions or misrepresentations of events, transactions, accounts, or other significant information from which financial statements are prepared, deliberate misapplication of accounting principles, policies, and procedures used to measure, recognize, report, and disclose economic events and business transactions and also intentional omissions of disclosures or presentation of inadequate disclosures regarding accounting principles and policies and related financial amounts.
There are massive issues that emanate from financial statement fraud. Financial statement fraud undermines the reliability, quality, transparency, and integrity of the financial reporting process and jeopardizes the integrity and objectivity of the auditing profession, especially aud.
The role of internal auditors in fraud risk management and the skill sets required in the current scenario...
The focus of audit has to change from transaction audit to value addition..
Office of the C&AG of India for the year 1955 on Manual of the Higher Audit D...Life of A Public Auditor
Office of the C&AG of India for the year 1955 on Manual of the Higher Audit Department, Government of Kerala (Issued By the Comptroller Cochin)(First-Edition) from the archive of C&AG's Central Archival Library and Museum....
Constituent Assembly Debates Volume VIII 30 May 1949 - Discussion on draft Co...Life of A Public Auditor
Constituent Assembly Debates Volume VIII 30 May 1949 - Discussion on draft Constitution of India relating to provisions of C&AG of India - Discussion on Amendment No. 1975 to 1982 and Speech of Dr. B R Ambedkar on constitutional provisions relating to C&AG of India from the archive of C&AG's Central Archival Library and Museum....
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An Introduction to Indian Government Accounts and Audit, Second Edition of 1940 issued under the authority of the Auditor General of India from the archive of C&AG's Central Archival Library and Museum...
Government of India Act 1935 - Provisions relating to Audit and Accounts was made part of Government of India Act 1935 from the archive of C&AG's Central Archival Library and Museum...
Audit Code, Appendix 16, Second Edition (Revised) 1934 on Instructions for the preparation of Appropriation Accounts and the Report of the Audit Officer thereon from the archive of C&AG's Central Archival Library and Museum...
Audit Code, Vol-1, First Edition, 1928 issued by the authority of Auditor General in India. Embodying all corrections issued to First Edition upto 30th November 1928 from the archive of C&AG's Central Archival Library and Museum...
Audit Code Volume-II Appendices and Forms, First Edition (Reprint), issued by authority of the Auditor General in India. Embodying all corrections up to 30th November 1928 from the archive of C&AG's Central Archival Library and Museum...
Compilation of Audit Rulings 1928 issued by authority of the Auditor General in India from the archive of C&AG's Central Archival Library and Museum...
An Introduction to Indian Government Audit, Second Edition (corrected up to 1st May 1925) from archive of C&AG's Central Archival Library and Museum...
Method of Selection for Gazzetted appointments in the Financial Department of...Life of A Public Auditor
Formation of a General Department of Account including the offices of Audit, Pay and Account on 4th December 1857 and Methods of selection for Gazetted Appointments in the Financial Department of the Government of India from the archive of C&AG's Central Archival Library and Museum....
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
3. What is fraud?
Fraud is the intentional use of false or misleading
information in an attempt to illegally deprive another
person or entity of money, property, or legal rights.
In order to constitute fraud, the party making the
false statement must know or believe that it is
untrue or incorrect and intended to deceive the
other party.
Fraud may be prosecuted as both a criminal and civil
offense.
Criminal punishments for fraud can include a
combination of prison, fines, and restitution to
victims
4. Fraud as a civil wrong
In common law jurisdictions, as a civil wrong, fraud is
a tort.
The remedies for fraud may include rescission (i.e.,
reversal) of a fraudulently obtained agreement or
transaction, the recovery of a monetary award to
compensate for the harm caused, punitive damages
to punish or deter the misconduct, and possibly
others.
5. Fraud may involve
Manipulation, falsification or alteration of
records or documents
Misappropriation/misapplication of assets.
Suppression or omission of the effects of the
transaction from records and documents
Recording of transaction without
substances/material/services
Misapplication of accounting policies
6. What is corruption/corrupt practice ?
Corruption is a form of dishonesty or criminal
offense or undertaken by a person or
organization entrusted with a position of
authority, to acquire illicit benefit or abuse power
for one's private gain.
Corrupt Practice means the offering, giving,
receiving or soliciting, directly or indirectly, of
anything of value to influence improperly the
actions of another party.
7. Fraud should be distinguished from error:
The following actions amount to error and not
fraud
• A mistake in gathering or processing data from
which financial statements are prepared.
• An incorrect accounting estimates arising from
oversight or misinterpretation of facts; and
• A mistake in the application of accounting
principles relating to measurement, recognition
classification presentation or disclosure.
8. • Bribery and Kickbacks:
• Changes in Original Contracts,
• Duplicate Payments
• Collusive or Cartel Bidding
• Conflict of Interest
• Defecting of Pricing
• False Invoices
• False Representations
• Splitting of Purchases
• Phantom Contractor
• Pilferage of Public Assets
• Tailored Specifications
• Supply Orders
TYPES OF FRAUD
9. Responsibility of Management & Audit
The prime responsibility for the detection of Fraud
and errors rests with management.
Management should strengthen the Internal Control
system for achieving the said goals.
Audit reviews the system of Internal Control system
and suggests the shortcomings observed
The Management is expected to document the
system established for prevention, detection,
response and follow up and reporting of fraud and
corruption.
10. Responsibility of Management & Audit..contd.
It should be borne in mind that if a material fraud was
perpetrated but not discovered in audit, the conduct of audit
personnel can be called in question, particularly if the
evidence was such as would arouse suspicion in an auditor of
normal prudence.
audit personnel need to be aware of the possibilities of fraud
at the planning stage and should be vigilant while carrying out
the audit work.
During audit of financial statements, two types of
intentional misstatements are relevant to the auditor
(i)Fraudulent financial reporting
(ii)Misappropriation of assets
Considerations of fraud in audit of financial statements
11. An auditor obtains reasonable assurance that the financial
statements taken as a whole are free from material
misstatement, whether caused by fraud or error.
Fraudulent financial reporting involves intentional
misstatements including omissions of amounts or disclosures. It
includes Manipulation, falsification (including forgery), or
alteration of accounting records or supporting documentation
from which the financial statements are prepared
Misappropriation of assets involves the theft of an entity’s
assets and can be perpetrated by employees as well as
management.
12. Considerations of fraud in performance audits
In performance audits, while selecting objectives, sub Objectives
and issues, the vulnerability/risk to fraud and corruption should be
given due consideration.
the effectiveness of internal controls to prevent and detect fraud
and corruption should be considered as one of the audit
objectives, depending upon the materiality and risk analysis.
Some of the significant areas for scrutiny from fraud angle could be
the integrity of performance information and evidence of delivery
of goods and services.
13. In the audit of receipts, it would be necessary in the case of a department
which is a receiver of public moneys to ascertain what arrangements
(internal controls) are in place to ensure
prompt detection
investigation and prevention of irregularities
double refunds
fraudulent or forged refund vouchers
Auditors may also suggest appropriate improvements in the systems and
procedures for prevention, detection and reporting of cases of fraud and
corruption.
Auditors may also suggest appropriate improvements in the systems and
procedures
Considerations of fraud in receipt audit
14. • Audit is responsible for reporting to the funding agency
whether the implementing agencies have carried out
expenditure on the scheme in accordance with the pattern
specified in the project appraisal report relating to the
schemes and instructions and to identify matters relating to
inadequacies in systems and control.
• An Auditor should look into inadequacies in systems and
control, cases of fraud or presumptive fraud, wasteful
expenditure and failure of administration to take corrective
action on recommendations contained in earlier report.
Considerations of fraud in audit of World Bank and
other externally assisted projects
15. Professional skepticism
Professional skepticism is an attitude that includes a
questioning mind and a critical assessment of audit
evidence.
It is a skill developed over time and a skill that auditors
should constantly build and refine.
For example, when considering significant estimates,
management should ask: are we considering all relevant
information? Are our estimates unbiased? Are there
alternative accounting treatments we haven’t considered?
Can we justify our selected accounting treatment?
Essentially, management should start by asking itself: what
questions would we expect our auditor to ask us?
16. Fraud awareness at the audit planning stage
Risk assessment
The field offices should carry out an independent risk
assessment and prioritize their audit planning accordingly, the
audit plans should focus on high risk areas.
The auditor may keep in view that the risk of fraud and
corruption could be higher in certain organisations like those
involved in procurement of goods and services.
The auditor should have a complete understanding of the
audited entity including the environment in which the entity
operates, the level of internal control and the past
performance of the audited entity especially previous
instances of fraud and corruption.
17. Identification of areas requiring
attention
An understanding of the audited entity
should enable the auditor to identify potential
high-risk areas and suitably modify audit
procedures and techniques.
Some of the common high risk areas (illustrative) are:
contracts of service/procurement
(for example, the fraud risk includes violation of
prescribed laws and regulations concerning the
procedures for inviting, receiving and processing of
tenders, selection of bidders)
18. inventory and / asset management;
sanctions/clearances;
revenue receipts (for example, incorrect valuation of goods,
inadmissible duty draw back claims, misuse of exemptions and
notifications regarding refund claims, embezzlement through
incorrect accountal of receipts, etc)
cash management;
Grants (like grants-in-aid to autonomous bodies non-
governmental organisations; for example, the fraud risk includes
violation of prescribed conditions in providing and administering
grants by the Government Departments or in spending by the
recipients, intentional misstatements in financial reporting in order
to receive unlawful grants);
Financial Statements
19. Identification of areas requiring attention..Financial Statements
operating information (for example, the fraud risk
includes overstatement / understatement of
accomplishments, progress in meeting performance
goals, number of citizens served, programme
improvements, compliance with policies, etc.)
computerized environment;
privatization of public sector functions (for example, the
fraud risk includes non-adoption of open competitive
process, manipulation of bidding terms and evaluation
criteria, etc.), joint ventures, public- private
partnerships, etc.;
20. Vigilance during the course of audit
During the course of audit work, the audit personnel
should be vigilant and seek explanations, if it comes
across possible fraud indicators.
Auditors need to be alert to deviations from
acceptable accounting standards including disclosure
requirements particularly when there is suspicion of
fraud and corruption.
The auditor may keep in view that when a fraud is
conducted there is a deliberate effort to conceal the
facts and distract the auditor.
21. Fraud and Audit Evidence
• The auditors should clearly understand that the audit
evidence obtained can be only persuasive and not
conclusive, yet the evidence in case of suspected
fraud and corruption ought to be closer to
conclusive. While reporting all cases of suspected
fraud or corruption, auditor shouldn’t draw any
judgment regarding the existence of fraud or
corruption but should suggest suspected
fraud/corruption or presumptive fraud.
22. Fraud and Audit Evidence…contd.
• Some of the checks, which could be applied to
determine the red flag items during the course of
audit, are illustrated below:
examine the use of delegation of powers
particularly in vulnerable areas;
examine the effectiveness and adequacy of
internal controls in various areas;
check for collusion between the supplier and
employees / management;
examine cases of misuse of financial powers;
23. Fraud and Audit Evidence…contd.
check for false statements and false claims:
examine evidence for cartelization, split purchases, collusive
bidding, over and under invoicing and making payments on
the basis of false progress reports;
check for loss of revenue due to evasion and / or non-
accountal or receipt;
examine for payment made for services / supplies not
received;
seek confirmation with other related parties;
checking of cross-linking of documents for evidence of known
wrongdoing; and
cases of misclassification
24. Audit approach
• Since complete evidence about cases of fraud and corruption
may bot be available to Audit, due care should be exercised in
arriving at an audit conclusion.
• When Auditors suspect the possibility of fraud and corruption,
they should establish whether it has taken place and there
has been resultant effect on the financial reporting, especially
whether the audit certificate requires qualification.
• When auditors intend to report on fraud and corruption, they
should ensure the reliability of audit evidence by verifying it
with source documents including third party evidence.
25. IT FRAUD
IT fraud could involved the manipulation of a computer or
computer data by whatever method in order to dishonestly
obtain money, property or some other advantage of value or
to causes losses.
Computer provide opportunities for their misuse for economic
or financial gains.
It fraud are committed by insiders, outsiders, vendors,
competitors, etc. Some frauds are committed by manipulation
of input, output or throughout of a computer system. Fraud
can also be committed by hacking into the system for causing
deliberate damage.
26. Documentation
The auditors should collect adequate documentation which
may provide evidence during subsequent enquiries,
investigations, court cases etc.
The documents should includes:
The identified and assessed risks of fraud.
The results of the audit procedures.
Communication about fraud made to management.
27. REPORTING
Initial Reporting
• Reports of individual cases of suspected/presumptive fraud/
corruption should be addressed confidentially, in the first
instances, to the controlling authority concerned with the approval
of Group Officers.
• Copies may simultaneously be sent confidentially to higher
authority in cases that are regarded to be so grave or serious.
• The situations/events that may be suggested of fraud/presumptive
fraud should be highlighted in the inspection reports with a
recommendation to the executive for detailed investigation and
response.
28. • In addition to the reporting to the management of the auditee
entity, material/significant cases of fraud and corruption may be
reported through separate confidential letters to the specified
investigating agency like Central Bureau of Investigation (CBI),
Central Vigilance Commission (CVC) in case of Union
Government and State Vigilance Commission/Lok Ayukta etc. in
case of State Government with the approval of the concerned
Accountant General or by him/her, depending upon the
seriousness of the cases.
• In case of financial audit, instances of possible fraud and
corruption may require making qualification in the Audit
Opinion on Financial Statements, depending upon the
materiality of the audit findings. In other cases they may be
reported to entity management in a special letter or in the
regular inspection reports, depending upon the circumstances.
29. • While forwarding the Bond Copy of the Audit Reports to
Headquarters, the AG, PAG etc. should highlighted in the
forwarding letter the number of cases of suspected fraud and
corruption together with the money value of the concerned
paras included in the bond copy.
• All such cases should be taken up immediately after approval of
the bond copy with the appropriate vigilance or investigative
authority by the AG even if these cases were reported to them
earlier.
• Such cases should be forwarded to the vigilance or investigative
authorities such as CBI, Central and State VC, Lok Ayukta, etc.
Through confidential letters with additional information that
these cases have been concluded in the CAG’s Audit Report.
• The reporting to the vigilance or investigative authorities may
be completed after approval of the bond copy, without waiting
for the availability of printed audit report.
30. • The draft of the annual post-Audit Report letter to the Chief
Ministers should contain a brief mention of issues relating to
fraud and corruption where such cases appear in Audit Reports.
Follow up
The filed offices shall institute mechanism for recording in cases
of fraud and corruption (including possible indicators of fraud
and corruption) noticed during the audit.
The AG may send annual confidential betters to the Secretaries
of the concerned
31. The Accountant General may send annual confidential letters to
the Secretaries of the concerned Administrative Department
indicating the details of the important cases of suspected fraud
and corruption.