Internal Auditing and Fraud

Course Overview

Fraud has significantly negative impact on the organization that may include financial reputation in addition to social and psychological implications. As per the surveys, the financial losses from fraud are found to be significant. Though cost of fraud is never measureable in term of time, the productivity including the reputation of customer relationships is adversely affected.

Organizations can be harmed depending upon the loss severity that is caused due to fraud activities. Organizations need a very strong fraud program that involves awareness, prevention, and detection of the key programs including the process of assessing the risk so that it can be identified within the organization.

Frauds are characterized into three types:

  • Pressure or Incentive: Fraudster is trying to commit the fraud so that personal needs can be met
  • Opportunity: Ability of the fraudster for committing the fraud
  • Rationalization: Ability of the fraudster to satisfy his mind for the committed fraud

Effective fraud management program is comprised of:

  • Company Policy for Ethics: “Tone at the top” from the senior management
  • Awareness of Fraud: To understand nature of the fraud, its causes and characteristics
  • Assessment of Fraud:  To evaluate risk of different types of fraud
  • Ongoing Reviews:  An audit activity which considers the fraud risk in each activity and then performs the most appropriate procedure that is based upon the type of risk
  • Prevention and Detection: Efforts that are taken in order to reduce the fraud opportunities which occur and motivate the individuals not to commit fraud because of the likelihood of getting punishment
  • Investigation: Investigate procedures and resources and then report the fraud

Course Objectives

The core objectives of the course are:

  • Awareness of fraud
  • Roles of fraud and tasks
  • Responsibilities of internal audit during audit engagements
  • Assessment of fraud risk assessment (e.g., to identify the factors of fraud risk and map the controls of potential frauds)
  • Detection of fraud and its prevention
  • Investigation of fraud
  • To form opinion on the controls that are related to fraud

Course Content

  • Introduction
  • Executive Summary
  • Defining the Term Fraud
  • Awareness of Fraud
    1. Reasons of fraud
    2. Examples of fraud
    3. Potential fraud indicators
  • Roles and Responsibilities for Fraud
  • Internal Audit Responsibilities During Audit Engagement
    1. To conduct the audit engagements
    2. Internal auditor skepticism
    3. To communicate with the board
  • Fraud Risk Assessment
    1. To identify the factors of fraud risk
    2. To identify the potential of fraud and prioritize frauds based on risks
    3. To map the controls of potential frauds and identified gaps
    4. To test operating effectiveness of fraud prevention and detecting controls
    5. To have documentation and report fraud risk assessment
  • Detection of Fraud and Prevention
    1. Prevention of fraud
    2. Training of fraud
    3. Detection of fraud
  • Investigation of Fraud
    1. Process of investigation
    2. Role of the internal auditing in investigations
    3. To conduct the investigation
    4. To report the fraud investigations
    5. Resolution of fraud incidents
    6. Fraud incidents communications
    7. Analyze the lessons that are learned

Course Methodology

The training is going to be highly interactive combination of lectures, group discussions, questionnaires, individual reflections, role plays, simulations and videos.

Target Audience

The course is targeting the Chief Audit Executives (CAEs), executive board members, operating management, assurance providers (OAPs), and professional regulatory bodies.

Duration

02 Days (08:30–14:30) with appropriate breaks for tea/refreshments and lunch.

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