2. Fraud Audit Pertemuan V Matakuliah: F0184/Audit atas Kecurangan Tahun: 2007

3. Bina Nusantara Mahasiswa diharapkan mampu mengidentifikasi audit atas kecurangan, dan audit keuangan Mahasiswa dapat mengetahui fungsi dari auditor kecurangan Mahasiswa diharapkan mengetahui perbedaan antara auditor kecurangan dan auditor keuangan Learning Outcomes 3

4. Bina Nusantara Fraud audit and financial audit Fraud Auditor Profile Fraud Auditor Vs Financial Auditor Outline Materi 4

5. Fraud Audit Fraud audit is discipline that focus on the intuitive process. The patterns to look for are the exceptions and oddities. Also one goes behind and beyond those transactions to reconstruct what may have led to them and what has followed from them. Fraud auditing is the discipline used to discourage, discern, and document such incident. Bina Nusantara 5

6. Financial Audit Financial auditing is intended to uncover material deviations and variances from standards of acceptable accounting and auditing practices or standard. Financial auditing concentrates on the present – on the adequacy of internal controls, on the reliability, validity, and mathematical accuracy. Bina Nusantara 6

7. Fraud Vs Financial Auditor The main focus of the fraud auditor is not the accounting system and internal controls against the standard (eg: IRFS, FASB) but: Where are the weakest link in this system’s chain of controls? What deviations from conventional good accounting practices are possible in this system How are off-line transactions handled, and who can authorize such transactions What would be the simplest way to compromise this system? Bina Nusantara 7

8. Fraud Vs Financial Auditor (Con’t) What control features in this system can be bypassed by higher authorities? What is the nature of the work environment? !!These questions may occur for years before they are discovered!! Bina Nusantara 8

9. Fraud Condition Fraud usually occur in the following conditions: Internal controls are absent, weak, or loosely enforced Employees are hired without due consideration for their honesty and integrity Employees are poorly managed, exploited, abused, or placed under great stress to accomplish financial goals and objectives Management models are themselves corrupt, inefficient, or incompetent A trusted employee has an irresolvable personal problem, usually of a financial nature Bina Nusantara 9

10. Fraud Condition (Con’t) Fraud usually occur in the following conditions: The industry of which the company is a part has a history or tradition of corruption The company has fallen on bad times-it is losing money or market share, or its products or services are becoming obsolete Bina Nusantara 10

11. Fraud Case !! There is no simple formula for conducting a fraud audit, nor are there any generally accepted checklist or patterned interviews. Fraud is a human phenomenon; humans vary a great deal, as do frauds, in terms of the techniques used!! Bina Nusantara 11

12. Fraud Case (con’t) Most fraud are not discovered in the course of routine financial audits but though: an allegation, complaint, or a rumor of fraud brought by a third party an auditor’s intuition or general suspicion that something is awry an exception from an expectation of a person senior to the suspect the sudden discovery that something is missing Bina Nusantara 12

13. Fraud Auditor Belief That fraud is possible even in accounting systems in which controls are tight That the visible part of a transaction fraud may involve a small amount of money, but the invisible portion can be substantial That red flags of fraud are discernible if one look long enough and deep enough That fraud perpetrators can come from any level of management or society Bina Nusantara 13

14. Fraud Auditor Traits and Skills SkepticismCuriosityPersistence Imagination Bina Nusantara 14