Question

Forensic Accounting Question

you have been retained to assist a client with the following situation. the client believes that there is something wrong and he wants you to evaluate his business and its exposure to theft and fraud. in less than 250 words, describe 10 things you would do to respond to the client's concerns

Answer 1

Diagnose - Detect - Respond

• What happened?

• Where did it happen?

• How many times did it happen?

• What is the volume / value involved?

• What ruled or thresholds have been breached?

• Are there any non-compliance issues with contracts and anti-fraud control gaps in processes?

Have a discussion about the organisation’s fraud risk management strategy that involves senior management, the board of directors and audit committee to garner top-level support. Build a cross-departmental fraud risk management committee. Talk about fraud risks and how organisations can benefit by enhancing their fraud risk management capabilities and share examples of fraud schemes in the news or from the organisation’s past experiences — effective risk management comes with openness and awareness.

Plan and execute a fraud risk management programme.

Establish clear roles, responsibilities and accountability for fraud risk management.

Set goals and timelines and measure the progress in implementing improvements.

Put an annual process in place to update the fraud risk management plan.

Re-evaluate the fraud risk management strategy based on changes in the business and risk environment.

Perform an anti-fraud control gap analysis.

Compare the organisation’s fraud risk management practices with leading global practices using appropriate fraud risk management tools.

This will help make the organisation’s anti-fraud controls robust as well as stay one step ahead of the fraudster.

Identify the missing elements and determine priorities for how anti-fraud control gaps, if any should be addressed. For those practices, which the organisation already has in place, use the recommended leading practices to help uncover further performance improvement opportunities.

Using the fraud risk management tool, which also provides a risk rating system (based on evaluation of business processes vis-a-vis their fraud vulnerability and its impact) proves to be an efficient and effective way to periodically evaluate the robustness of anti-fraud control measures.

Fraud risk management is not a one-time exercise but a continuous process.

As businesses change and grow, so do their fraud risks. We therefore recommend a continuous improvement approach to the fraud risk management strategy that requires regular measurement of where the business is and where it wants to be in terms of effectively preventing, detecting, and deterring fraud.