Financial Crime - Tutorial 8

Miss Farah, an auditor, found out that events conducted by Company X show an unreasonable amount spent.

Based on the situation above, what kind of fraud symptom is shown?

• accounting anomalies

  
  

• extravagant lifestyle

• analytical anomalies

• weak internal controls

Which of the below shows a lifestyle symptom?

• Employees whose regular expenses are more than their known income.

•  The purchase expenses are high during the year however there is a reduction in payable accounts.

•  The procurement documents were prepared and authorised by the same person

• Fake medical bills being submitted for several employees by 22 "doctors" who had the same two addresses.

During the audit, the accountant was unable to provide most of the requested documents. Which symptom is this referring to?

• weak internal controls

• accounting anomalies

• extravagant lifestyle

• analytical anomalies

Which of the following is NOT included in internal control weakness?

• lack of employees

• lack of segregation of duties

• lack of proper authorization

• lack of physical safeguards

There is no surveillance system, such as CCTV installed at the workplace. Hence, workers tend to commit fraud. This indicates what type of fraud symptom?

• extravagant lifestyle

• accounting anomalies

• analytical anomalies

• weak internal controls

 What are the terms used to assess likelihood of occurrence?

 I. low

II. moderate

III. high

IV. very high

• 1. I, II, III

• 1. I, III, IV, 

• 1. II, III, IV

• 1. None of the above

Choose the CORRECT continuous fraud monitoring.

1. I. Capitalize on available resources.

2. II. Use a range of approaches

3. III. Use auditors

4. IV. Involve stakeholders.

• 1. I, II, III

• 1. II, III, IV

• 1. I, II, IV

• 1. All of the above

Which of the following is correct about providing guidance on appropriate risk management goals and objectives and overseeing management implementation of internal controls?

• Auditors' Role & Responsibility with respect to internal control

• COSO Internal Control

• Board's Role & responsibility with respect to internal control

• Fraud triangle

What are the steps involved in monitoring risk operational areas to fraud?

1. I. Identify risk areas

2. II. Understand and assess the scale risk

3. III. Analyse fraud risk

4. IV. Investigate fraud cases

• 1. I, II, IV

• 1. I, III, IV

• 1. II, III, IV

• 1. I, II, III

The benefit is related to the "detection of risk while it is still small and manageable. An effective system of risk assessment can build internal control systems that can identify emerging problems at early stages"?

• Effective risk reports

•  The benefit of internal control

• Benefit of risk monitoring

• Benefit of risk assurance to internal and external stakeholders