Professional Documents
Culture Documents
Chapter 11
Misappropriation of assets
Incentives/Pressures
Opportunities Attitudes/Rationalization
Discussion Procedures
Nature of communications
Conflicts of interest
Prompt communications
Payroll fraud 12
3
2003 1998
2006 Prentice Hall Business Publishing, Auditing 11/e, Arens/Beasley/Elder 11 - 27
Rates of Fraud Occurrence
Conflict of interest 12
9
Inventory theft 11
11
Kickbacks 9
6
Financial reporting 7
fraud 3
2003 1998
2006 Prentice Hall Business Publishing, Auditing 11/e, Arens/Beasley/Elder 11 - 28
Specific Fraud Risk Areas
77%
Internal controls 51%
52%
65%
Internal audit 43%
47%
Notification 63%
by employee 58%
51%
54%
Accident 37%
28%
41%
Anonymous tip 35%
26%
Notification 34%
by customer 41%
34%
Notification by 19%
regulatory or law 16%
enforcement agency 8%
Notification 16%
by vendor 11%
15%
12%
External audit 4%
5%
Informational inquiry
Assessment inquiry
Interrogative inquiry
Evaluating responses
Listening techniques