The Fraud Audit – Responding to the Risk of Fraud in Core Business Systems

Preface xi
<p>Chapter 1: What Is a Fraud Audit? 1</p>
<p>Why Respond to Fraud Risk? 3</p>
<p>The Fraud Paradigm 4</p>
<p>Fraud Auditing 5</p>
<p>Fraud Defined 8</p>
<p>The Fraud Triangle 8</p>
<p>Responses to the Risk of Fraud 12</p>
<p>Summary 13</p>
<p>Chapter 2: Professional Standards 15</p>
<p>Overview 16</p>
<p>Fraud Audit Standards 18</p>
<p>Summary 25</p>
<p>Chapter 3: Fraud Scenarios 27</p>
<p>Key Definitions and Terms 28</p>
<p>Fraud Risk Structure 30</p>
<p>Classifying Fraud 32</p>
<p>Identifying Fraud Scenarios 41</p>
<p>Fraud Audit Considerations 46</p>
<p>Summary 51</p>
<p>Chapter 4: Brainstorming: The Implementation of Professional Standards 53</p>
<p>What Is Brainstorming? 54</p>
<p>When to Brainstorm 56</p>
<p>Summary 66</p>
<p>Chapter 5: Assessment of Fraud Likelihood 69</p>
<p>Preparing a Fraud Risk Assessment 69</p>
<p>Summary 81</p>
<p>Chapter 6: Building the Fraud Audit Program 83</p>
<p>Traditional Audit versus the Fraud Audit 84</p>
<p>Responding to the Risk of Fraud 84</p>
<p>A Fraud Audit Program 85</p>
<p>Testing Procedures 89</p>
<p>Fraud Concealment Effect on the Audit Response 97</p>
<p>Audit Evidence Issues 103</p>
<p>Fraud Scenario Examples 105</p>
<p>Summary 110</p>
<p>Chapter 7: Data Mining for Fraud 111</p>
<p>The Art and Science of Data Mining 112</p>
<p>Strategies for Data Mining 129</p>
<p>Limitations of Data Mining 131</p>
<p>Summary 132</p>
<p>Chapter 8: Fraud Audit Procedures 133</p>
<p>Basis of Fraud Audit Procedures 133</p>
<p>Levels of Fraud Audit Procedures 135</p>
<p>Design of Fraud Audit Procedures 138</p>
<p>Summary 145</p>
<p>Chapter 9: Document Analysis 147</p>
<p>Document Analysis and the Fraud Audit 148</p>
<p>Levels of Document Examination 148</p>
<p>Document Red Flags 150</p>
<p>Brainstorming Sessions and Document Red Flags 155</p>
<p>The Fraud Audit Program and Document Red Flags 156</p>
<p>Summary 156</p>
<p>Chapter 10: Disbursement Fraud 159</p>
<p>Fraud Risk Structure 159</p>
<p>Audit Approaches 166</p>
<p>Summary 178</p>
<p>Chapter 11: Procurement Fraud 179</p>
<p>Fraud Risk Structure 181</p>
<p>Audit Procedures 195</p>
<p>Summary 202</p>
<p>Chapter 12: Payroll Fraud 205</p>
<p>Fraud Risk Structure 206</p>
<p>Audit Procedures 212</p>
<p>Summary 222</p>
<p>Chapter 13: Revenue Misstatement 223</p>
<p>Fraud Risk Structure 224</p>
<p>Audit Approach 231</p>
<p>Summary 236</p>
<p>Chapter 14: Inventory Fraud 237</p>
<p>Fraud Risk Structure 238</p>
<p>Audit Procedures 243</p>
<p>Summary 249</p>
<p>Chapter 15: Journal Entry Fraud 251</p>
<p>Fraud Risk Structure 252</p>
<p>Audit Procedures 261</p>
<p>Summary 266</p>
<p>Chapter 16: Program Management Fraud 269</p>
<p>Fraud Risk Structure 270</p>
<p>Audit Approach 277</p>
<p>Summary 282</p>
<p>Chapter 17: Quantifying Fraud 283</p>
<p>Conveying the Impact to Management 284</p>
<p>Role of Evidence in Calculating a Fraud Loss 287</p>
<p>Impact on the Fraud Audit 289</p>
<p>Options for Management 292</p>
<p>Case Studies 293</p>
<p>Summary 296</p>
<p>Appendixes 297</p>
<p>Appendix A 298</p>
<p>Appendix B 311</p>
<p>Appendix C 325</p>
<p>Appendix D 339</p>
<p>Appendix E 347</p>
<p>Appendix F 360</p>
<p>Appendix G 363</p>
<p>About the Author 365</p>
<p>Index 367</p>