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DWalker: Posted on Thursday, January 26, 2012 10:41 AM
Different Fraud Schemes impact the basic Financial Statements is a variety of ways. The following examples provide very simple logic flows of three types of fraudulent behaviors 1) Billing or Payables Schemes, 2) Premature or Fictitious Revenue Recognition, 3) Skimming Schemes. The general themes of the analysis necessary to identify the "Red Flags" associated with thee schemes are cited. (Note: Impact on Statement of Cash Flows has been ignored here for simplicity within diagrams) |
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D Walker: Posted on Monday, January 02, 2012 8:24 PM
The engagement of an licensed audit/CPA firm to perform an annual audit, complete with compliance testing, for the purpose of publishing financial statements is not an adequate effort by an organization to deter fraud. Even in the environment under SOX, the audit firm does not approach its engagement with the purpose of fraud detection or subsequent investigation. Under SOX it is the responsibility of the CEO/CFO to certify that the organizations internal controls are adequate, and have been reviewed by the CFO within the last ninety days. |
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