Why do Fraudsters do it?

As a fraud examiner, we consider the Fraud Triangle:-

  • Pressure
  • Opportunity
  • Rationalisation

In 2008 a Harvard Business School professor, Eugene Soltes examined this question and in 2016 published a book on the subject.

He found that middle management and employees further down the corporate ladder might commit fraud because they found a ready source of cash to ease their economic problems.

What puzzled Soltes is why well-paid business people committed fraud and he interviewed Read more

Posted on November 16, 2017 by Paul Leonard

Forensic Techniques To Detecting Procurement Fraud

The starting point for such an investigation is gathering all the payments to suppliers preferably over a number of years.  We then sort this information to enable us to review trends in the payment history.  Once this data is gathered, sorted and reviewed we carry out the following procedures.

1. Background checks on the suppliers

  • Internet presence – is their website professionally designed and does it advertise the goods and services that were supplied
  • Is the supplier reputable and who are the suppliers’ other clients
  • Is the supplier company a long-standing registered company or recently incorporated
  • Who are the Directors/shareholders of the supplier and is there any links to key staff in the business we are examining
  • What is the address used by the supplier and carry out checks on the address for multiple users

Read more

Posted on November 14, 2017 by Paul Leonard

Ethical issues facing auditors – part 3/3

The Ethical Standard for Auditors, issued by the Irish Auditing & Accounting Supervisory Authority set out the basic principles that must be applied when carrying out an audit.

All audit firms must comply with this standard. The standard also addresses certain circumstances where an auditor may be faced with an issue that challenges their ability to act independently. Where possible, the standard seeks to advise audit firms on circumstances that are prohibited and also circumstances that are only allowed after adequate safeguards have been put in place.

Non-Audit Services

Regularly firms will provide additional services to an audit client (referred to as non-audit services). This can create a number of threats to an auditors independence (self-review, self interest, management, advocacy, familiarity and intimidation threats)

Before the firm accepts to provide a non-audit service to the client, the engagement partner should:

  • identify and assess the significance of any related threats to the integrity or objectivity of the firm and covered persons, including whether independence would be compromised
  • identify and assess the effectiveness of the available safeguards to eliminate the threats or reduce them to a level where independence would not be compromised
  • consider whether it is probable that an objective, reasonable and informed third party, having regard to the threats and safeguards, would conclude that that the proposed non-audit / additional service would not impair integrity or objectivity and compromise the independence of the firm or covered persons.

If the auditor determines that Read more

Posted on November 7, 2017 by Michael O'Halloran

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