大一下f1學(xué)習(xí)acca-會(huì)計(jì)師與企業(yè)and preventing fraud

1、Chapter 10Identifying and preventing fraudWhat is fraud?Potential for fraudImplications of fraud for the organisationSystems for detecting and preventing fraudResponsibility for detecting and preventing fraudMoney launderingDeprivation by deceit2 main categories of fraudRemoval of funds or assets fr

2、om a businessIntentional misrepresentation of the financial positionWhat is fraud? 1Removal of funds or assets from a businessTheft of cash or inventoryPayroll fraudTeeming and ladingFictitious customers, collusion with customersBogus supply of goodsPaying for goods not receivedManipulation of cash

3、bookMisuse of assetsWhat is fraud? 2Intentional misrepresentation of the financial positionOvervaluation of inventoryFictitious salesManipulation of year end eventsUnderstating expensesManipulation of depreciation figuresWhat is fraud? 3PrerequisitesDishonestyMotivationOpportunityThese conditions mu

4、st exist to make fraud a possibilityPotential for fraud 1High fraud riskLack of integrityExcessive pressuresPoor control systemsUnusual transactionsLack of audit evidencePotential for fraud 2Business risksProfits deviating from industry normsTurnover increasing rapidlyMarket opinionComplex group str

5、uctureLarge organisationPotential for fraud 3Personnel risksSecretive behaviourExpensive lifestyleLong hoursLow moraleLack of segregation of dutiesAutocratic stylePotential for fraud 4Computer fraudThe computer is frequently the vehicle through which fraud is carried outLack of trainingComputer hack

6、ersRisk awarenessUser friendly and flexible systemsPotential for fraud 5The affect on the firm depends on the type of fraudRemoval of funds or assetsProfits lower and/or business has fewer assetsNet asset position weakenedReturns to shareholders fallReduced working capitalCannot operate effectivelyC

7、ompany collapses in serious casesImplications of fraud 1Intentional misrepresentationArtificially enhanced:Distributions too highRetained profits lowShortfalls in working capitalIncorrect decisionsStakeholders misledImplications of fraud 2Intentional misrepresentationResults understated:Returns may

8、be reducedShare price fallsLoan finance restrictedNegative publicityLegal consequencesImplications of fraud 3Managing fraud risk is a key part of managing business risks in generalThere must be a willingness to enforce controlsManagers and staff need to be aware of their responsibilities. There may

9、even be a fraud officer.Systems for detecting and preventing fraud 1Fraud detection helped by having information readily available, and encouraging employees to whistle blowInternal audit must ensure systems and controls are thoroughly reviewed External audit must assess the risk of fraud having a m

10、aterial impactInvestigations establish extent of the loss, how it occurred, who was implicated and the role of the control systemSystems for detecting and preventing fraud 2General fraud prevention policiesEmphasising ethicsRecruitment proceduresPersonnel controlsTraining and awarenessSegregation of

11、 dutiesSystems for detecting and preventing fraud 3More fraud prevention policiesAppropriate documentationLimitation controlsPhysical securityAuthorisation policiesStandard proceduresComputer securitySystems for detecting and preventing fraud 4It is the responsibility of the directors to take such s

12、teps as are reasonable to prevent and detect fraud.Directors must ensure that: Assets are safeguarded Activities are honest Financial information is reliableAlso: Deter fraudulent conduct Detect any that occursResponsibility for detecting & preventing fraud 1External auditorsExpress an opinion as to

13、 true and fair viewDesign procedures so as to have a reasonable expectation of detecting fraudDocument findings and report to managementArrange for reporting to an appropriate authority if serious enoughQualify audit report if necessary!Responsibility for detecting & preventing fraud 2Money launderi

14、ng:Attempts to make the proceeds of crime appear respectable. There are 5 UK offences in relation to ML: Acquisition, possession or use of such proceeds Assisting another to retain such proceeds Concealing such proceeds Failure to report knowledge/suspicion of ML Tipping off (warning a suspected lau

15、nderer)Money laundering 1Duties as an accountantAccountants and other professionals have a duty to report money laundering. Failure in relation to that duty is a criminal offence which may result in a prison term of up to 5 yearsThe rules on money laundering in the UK are found mainly in the FSA SYS

16、C Handbook. New legislation is being introduced in response to International and European measures.Money laundering 2Three phases in the process of money laundering:Placement the actual disposal of the proceeds of initial illegal activityLayering the transfer of monies to conceal the original source

17、Integration having been layered, the money has the appearance of legitimate fundsMoney laundering 3Vienna Convention 1988This was the first international agreement to stop the international effects of money laundering. Nations agreed to make it illegal (hence the Criminal Justice Act 1993 in UK make

18、s it illegal).Key issues Mutual assistance ExtraditionMoney laundering 4The nature of money laundering makes it ideal to carry out internationally, transferring money between countries. This can make it difficult to police. It is also why it is important that it is illegal in as many countries as possible.Money laundering 5Financial Action Task Force (FATF)Inter-government body made up of over 30 member states and international organisationsAimsDevelop and promote policies to combat MLPrevent proceeds being used in future criminal activityMoney laundering 6FATFHas developed 40 mendationsTh