Assume that you have been promoted as the Internal Audit Director of your employer organization. Your employer organization is concerned about the growing trend of fraudulent activities in larger organizations recently and has asked you to plan and design an effective fraud detection program to deter and detect potential fraudulent activities. Consider the following factors in planning and designing a fraud detection program for your employer organization:

• Consider the provisions of Statement of Auditing Standards No. 99 (SAS 99) concerning the auditor’s responsibility with regard to fraud detection.
• Gather information to identify the risks of fraud at your employer organization by planning and conducting risk assessment procedures, conducting brainstorming sessions, and inquiring management and company personnel concerning their awareness of frauds with the employer organization.
• Conduct various analytical procedures by using computer assisted audit tools and techniques (CAATTs).
• Plan and design a fraud detection program based on the results of the risk assessment procedures conducted above.
• Evaluate the internal control systems put in place by the employer organization to prevent potential frauds.
• Outline procedures for evaluating and documenting the evidence gathered by the fraud detection program.
• Outline the communication procedures to be implemented when communicating the results of the fraud detection program to members of the upper management of your employer organization.
• Discuss the post-implementation evaluation program to assess the overall effectiveness of the fraud detection program of your employer organization.

Answer rating: 100% (QA)

It is indisputable that an auditor of financial statements has a fraud detection responsibility Auditing Standard AS 1001 Responsibilities and Functions of the Independent Auditor clearly states that ... View the full answer