© 2002 Association of Certified Fraud Examiners. All rights reserved. The Certified Fraud Examiners’ Fraud Prevention Checkup - An Introduction Toby J.F.

Slides:



Advertisements
Similar presentations
Organizational Governance
Advertisements

OPERATING EFFECTIVELY AT WESD. What is Internal Control? A process designed to provide reasonable assurance the organizations objectives are achieved.
ASX Corporate Governance Council
Chapter 14 Fraud Risk Assessment.
Continuous Auditing Global Technology Auditing Guide 3 Twelfth Continuous Auditing and Reporting Symposium Rutgers Business School November.
Core principles in the ASX CGC document. Which one do you think is the most important and least important? Presented by Casey Chan Ethics Governance &
It’s Time to Talk About Risk and Control
Introduction to Enterprise Risk Management (ERM)
How JCPenney is Managing Corporate Risk
Tax Risk Management Keeping Up with the Ever-Changing World of Corporate Tax March 27, 2007 Tax Services Bryan Slone March 27, 2007.
1 INTERNAL CONTROLS A PRACTICAL GUIDE TO HELP ENSURE FINANCIAL INTEGRITY.
2011 Governance, Risk, and Compliance Conference August 29 – 31, 2011 / Orlando, FL, USA The Top Four Essential Objectives to Auditing ERM Stephen E. McBride,
Chapter 7 Control and AIS Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-1.
August 9, 2005UCCSC Converting Policy to Reality Building Campus Security Programs Karl Heins -- Director of IT Audit Services Office of the University.
IS Audit Function Knowledge
© 2013 Cengage Learning. All Rights Reserved. 1 Part Four: Implementing Business Ethics in a Global Economy Chapter 8: Developing an Effective Ethics Program.
The Information Systems Audit Process
Implementing and Auditing Ethics Programs
The global body for professional accountants Overcoming the challenges of implementing IPSASs & audit landscape Chris Ridley (ACCA Public Sector Global.
“The Impact of Sarbanes Oxley, An Evolving Best Practice” Ellen C. Wolf Senior Vice President & Chief Financial Officer American Water National Association.
Building a Compliance Risk Monitoring Program HCCA Compliance Institute New OrleansApril 19, 2005 Lois Dehls Cornell, Esq. Assistant Vice President, Deputy.
PAINTING THE FULL PICTURE
Tan Jenny 23 September 2009 SESSION 4: Understanding Your IT Control Environment & Its Readiness.
Chapter 11.  The board is ultimately responsible for risk management  Oversee strategic risks, operational risks, and financial risks  Many federal.
National Association of College and University Attorneys 1 November 11, 2009 NACUA Fall 2009 Workshop November 2009.
Internal Auditing and Outsourcing
Performance Audit Fraud management in local government Report 19: David Toma Manager 24 July 2015.
DAA and GEP Orlando Audit & Compliance or Audit vs. Compliance.
D-1 McGraw-Hill/Irwin ©2005 by the McGraw-Hill Companies, Inc. All rights reserved. Module D Internal, Governmental, and Fraud Audits “I predict that audit.
Chapter 3 Internal Controls.
Implementing and Auditing Ethics Programs
HROFFICE USER CONFERENCE 2005 Creating an Effective Ethics and Compliance Program Ascentis User Group September, 2005.
Risk Management Reconstructed Implementing fraud risk intelligence practices July 2011 KPMG FORENSIC SM.
CORPORATE COMPLIANCE Tim Timmons Vice President Compliance and Regulatory Services Health Future, LLC.
UNM and Health System Internal Audit Departments Internal Audit Department Orientation Manu Patel, Internal Audit Director Purvi Mody, Executive Director,
Presented to President’s Cabinet. INTERNAL CONTROLS are the integration of the activities, plans, attitudes, policies and efforts of the people of an.
FRAUD Students name: Professors name: Course: Date:
Developing and Implementing an Effective Compliance Program Mary Sacilotto,BA,CHC Chief Compliance Officer Alliance, Inc.
Developing an Effective Ethics Program
Establishing A Compliance Program: It Makes Sense
© 2013 Cengage Learning. All Rights Reserved. 1 Part Four: Implementing Business Ethics in a Global Economy Chapter 9: Managing and Controlling Ethics.
Implementing and Auditing Ethics Programs
1 Today’s Presentation Sarbanes Oxley and Financial Reporting An NSTAR Perspective.
HOTLINE: The Value of internal Audit at Georgia Tech 1 Department of Internal Auditing.
The views expressed in this presentation do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System Association.
Audit Committee Roles & Responsibilities Audit Committee July 20, 2004.
The Audit as a Management Tool Vermont State Auditor’s Office – April 2009.
00 CHAPTER 1 Governance, Ethics, and Managerial Decision Making © 2009 Cengage Learning.
1 Sarbanes-Oxley Overview. 2 Sarbanes-Oxley Act Summary The Sarbanes-Oxley Act of 2002 §201Prohibited Non-Audit Services §202Audit Committee Pre-Approval.
Risk Management & Corporate Governance 1. What is Risk?  Risk arises from uncertainty; but all uncertainties do not carry risk.  Possibility of an unfavorable.
Development vs. Finance Healthy Friction November 3 – 4, 2009 Presented By Ben Aase and Jen Foley.
Managing Records: Good government, Better business. FOI Presentations to Boards & Committees Cayman Islands National Archive November 2008.
Indiana Regional Sewer District Association October 26, 2015.
Tax Administration Diagnostic Assessment Tool MODULE 11 “POA 9: ACCOUNTABILITY AND TRANSPARENCY”
Copyright © 2007 Pearson Education Canada 9-1 Chapter 9: Internal Controls and Control Risk.
Developing an Effective Ethics Program
COMPLIANCE MANAGEMENT – VARIOUS PROVISIONS OF LABOUR LAW and STATUTORY REGULATIONS BY OPTIMUM COMPLIANCE CONSULTANTS PVT LTD.
Internal Controls For Municipalities Vermont State Auditor’s Office – August 2008.
Business Integrity and Fraud Prevention By Kelvin Ko and Andy Cheung.
jasa.org Board of Directors Presentation & Training February 24 th, 2016 Corporate Compliance Program.
RISK MANAGEMENT IN THE PUBLIC SECTOR CONVERGING MULTIPLE STAKEHOLDER’S EXPECTATIONS Organised by National Treasury Presented by WELEKAZI DUKUZA CEREBRO.
Lecture 5 Control and AIS Copyright © 2012 Pearson Education 7-1.
SUNY Maritime Internal Control Program. New York State Internal Control Act of 1987 Establish and maintain guidelines for a system of internal controls.
Chapter 5 ASX Guidelines for Listed Companies
Implementing and Auditing Ethics Programs
A Framework for Control
Risk Management: why and how to protect your health center
QUALITY ASSURANCE AND IMPROVEMENT PROGRAM
Fy18-19 Compliance Plan Review & Board Member Training
Internal Audit’s Role in Preventing Fraud and Corruption
Presentation transcript:

© 2002 Association of Certified Fraud Examiners. All rights reserved. The Certified Fraud Examiners’ Fraud Prevention Checkup - An Introduction Toby J.F. Bishop CFE CPA FCA President & Chief Executive Officer Association of Certified Fraud Examiners

© 2002 Association of Certified Fraud Examiners. All rights reserved. Current Fraud Concerns Fraudulent financial reporting Legal risks for executives –Civil liability –Criminal (jail time) Financial losses for investors Reputation damage to companies/brands Crisis of confidence

© 2002 Association of Certified Fraud Examiners. All rights reserved. An Appropriate Response Fraud prevention is 80% of the solution Objective evaluation of an entity’s fraud prevention processes Prompt action to fix gaps/breakdowns Annual testing Ongoing fraud education and training

© 2002 Association of Certified Fraud Examiners. All rights reserved. The Certified Fraud Examiners’ Fraud Prevention Checkup A high-level checkup of an entity’s fraud prevention processes Form available free at Identifies major gaps Provides an overall score

© 2002 Association of Certified Fraud Examiners. All rights reserved. Benefits to Entities That Use This Tool It provides insights that senior management, the board of directors and audit committee will value highly It could save the entity from catastrophic financial and reputational losses It could help build confidence in the entity internally and by the public It’s simple and inexpensive

© 2002 Association of Certified Fraud Examiners. All rights reserved. Benefits for CFEs Who Apply This Tool It provides insights that senior management, boards of directors and audit committees will value highly It can be performed very inexpensively It can help you win new clients and deepen existing relationships It is being promoted in the media by the ACFE

© 2002 Association of Certified Fraud Examiners. All rights reserved. But CFEs Should Manage Their Liability Risks Risk of false perception of assurance Be careful not to guarantee “no fraud” Anti-fraud controls in existence vs. operating effectively Ongoing frauds may be uncovered Legal risks to entity evaluated if control gaps are identified but not fixed

© 2002 Association of Certified Fraud Examiners. All rights reserved. Who Should Perform the Checkup? Ideally a collaboration between a Certified Fraud Examiner and knowledgeable people inside the entity (e.g., internal auditors) Helpful to interview senior management But also talk to other levels of employees to get a reality check

© 2002 Association of Certified Fraud Examiners. All rights reserved. The Certified Fraud Examiners’ Fraud Prevention Checkup The seven elements: –Fraud risk oversight (20 pts) –Fraud risk ownership (10 pts) –Fraud risk assessment (10 pts) –Fraud risk tolerance and risk management policy (10 pts) –Process level controls/anti-fraud re-engineering (10 pts) –Environment level controls (30 pts) –Proactive fraud detection (10 pts)

© 2002 Association of Certified Fraud Examiners. All rights reserved. Fraud Risk Oversight To what extent has the entity established a process for oversight of fraud risks by the board of directors or others charged with governance (e.g., an audit committee)?

© 2002 Association of Certified Fraud Examiners. All rights reserved. Scoring – Risk Oversight Score: Award from 0 (process not in place) to 20 points (process fully implemented, tested within the past year and working effectively). Note: For all questions, award no more than half the available points if the process has not been tested within the past year.

© 2002 Association of Certified Fraud Examiners. All rights reserved. Fraud Risk Ownership To what extent has the entity created “ownership” of fraud risks…? Chief Executive currently “owns” the risk, but needs to make others responsible too A member of senior management, and All business unit managers

© 2002 Association of Certified Fraud Examiners. All rights reserved. Fraud Risk Assessment To what extent has the entity created an ongoing process for identifying the significant fraud risks to which the entity is exposed? –Potentially catastrophic risks –Costly risks –Tailored to the particular entity –Can be part of enterprise risk management

© 2002 Association of Certified Fraud Examiners. All rights reserved. Fraud Risk Tolerance and Risk Management Policy To what extent has the entity identified and had approved by the board of directors: –Its tolerance for different types of fraud risks? –A policy on how it will manage its fraud risks? Align risk tolerance of management with that of board of directors & audit committee Business decisions to reduce fraud risks

© 2002 Association of Certified Fraud Examiners. All rights reserved. Process Level Controls/ Anti-Fraud Re-engineering To what extent has the entity implemented measures to reduce each of the significant fraud risks identified in its risk assessment, through: –Anti-fraud process re-engineering (removing the opportunity)? –Process level controls to prevent, deter and detect fraud

© 2002 Association of Certified Fraud Examiners. All rights reserved. Environment Level Anti-Fraud Controls To what extent has the entity implemented a process to promote ethical decisions, deter wrongdoing and facilitate two-way communication on difficult issues? Most difficult area to evaluate Difference between existence and operating effectiveness of controls can be crucial Employee surveys are highly desirable

© 2002 Association of Certified Fraud Examiners. All rights reserved. Key Elements of Environment Level Controls Senior member of management responsible Values-based code of conduct Regular training (including fraud) Advice and reporting systems Investigation plans Monitoring of compliance

© 2002 Association of Certified Fraud Examiners. All rights reserved. Key Elements of Environment Level Controls Regular measurement of achievement of ethics/compliance and fraud prevention goals –Employee attitude surveys, fraud measures Incorporate ethics/compliance and fraud prevention goals into performance measures for evaluating/compensating employees

© 2002 Association of Certified Fraud Examiners. All rights reserved. Proactive Fraud Detection To what extent has the entity established a process to detect, investigate and resolve potentially significant fraud? –Proactive fraud detection testing –Targeted at significant fraud risks identified in the fraud risk assessment –Embedded fraud detection/audit “hooks” –Automated monitoring (where legal)

© 2002 Association of Certified Fraud Examiners. All rights reserved. Interpreting the Entity’s Overall Score Desirable score is 100 points Most entities will fall short initially Not currently considered a “material weakness in internal controls” that is a reportable condition But significant gaps should be closed promptly to avoid disaster

© 2002 Association of Certified Fraud Examiners. All rights reserved. Recommended Next Steps Study the ACFE Fraud Prevention Checkup Promote it to your current and target clients Perform checkups and identify major gaps in clients’ fraud prevention processes Providing anti-fraud consulting services to help clients fix those gaps

© 2002 Association of Certified Fraud Examiners. All rights reserved. Thank You Any questions? ACFE Fraud Prevention Checkup pdf file available at PowerPoint presentation available to members shortly. +1 (512)