Course Information

Auditors are expected to have basic fraud knowledge to meet the expectations outlined in industry guidelines and corporate job descriptions. This course will cover the minimum fraud standards expected of auditors using a case study classroom approach. This hands-on training will cover a current fraud case to give attendees fraud basics while also allowing them to apply the skills needed to build and refine their fraud auditing skillsets.

Objectives

• Discuss the basic elements of fraud

• Review internal audit industry requirements fraud detection

• Discuss and review a current fraud case

• Discuss techniques to identify fraud within your organization

• Learn how to apply traditional audit strategies to fraud audits

• Discuss the need to evaluate and refine your audit plan and testing strategy when fraud is suspected

Outline

Module 1: Setting the Stage – Understanding Fraud

• Definition of fraud (intent, deception, personal gain)

• The Fraud Triangle (pressure, opportunity, rationalization)

• Types of fraud:

  • Asset misappropriation

  • Financial statement fraud

  • Corruption schemes

Module 2: The Case Introduction – “YIKES! We Have Fraud”

• Scenario Setup:

  • Participants are introduced to a fictional company:

  • Mid-sized organization experiencing:

  • Unusual revenue spikes

  • Vendor complaints

  • Anonymous whistleblower tip

• Materials Provided:

  • Financial summaries

  • Internal audit reports

  • Email excerpts

  • Vendor data

Module 3: Fraud Risk Assessment Framework

• Steps in fraud risk assessment:

  • Identify fraud risks

  • Assess likelihood and impact

  • Map existing controls

  • Identify gaps

• Risk indicators:

  • Behavioral red flags

  • Transactional anomalies

  • Control weaknesses

• Tools Introduced:

  • Fraud Risk Matrix

  • Heat mapping

Module 4: Internal Controls & Where They Fail

• Preventive vs. detective controls

• Common control breakdowns:

  • Lack of segregation of duties

  • Management override

  • Poor monitoring

  • Control testing basics

Module 5: Designing Audit Procedures for Fraud Risk

• Linking risks to audit procedures

• Substantive vs. control testing

• Data analytics for fraud detection:

  • Duplicate payments

  • Benford’s Law basics

  • Trend analysis

• Sample Procedures:

  • Journal entry testing

  • Vendor validation

  • Revenue cut-off testing

Module 6: Investigating the Case – Digging Deeper

Scenario Development:

• New evidence is introduced:

  • Suspicious vendor relationships

  • Altered documents

  • Override of approvals

Module 7: Reporting & Communicating Fraud Risk

• Writing clear audit findings:

  • Condition

  • Criteria

  • Cause

  • Effect

• Communicating with:

  • Management

  • Audit committee

  • Legal teams

• Sensitivity and confidentiality

Module 8: Lessons Learned & Prevention Strategies

• Strengthening fraud prevention programs

• Building a fraud-aware culture

• Continuous monitoring techniques

• Role of whistleblower programs

• Final Discussion:

  • “What would you fix first?”

  • Key Takeaway:

  • Prevention is always more cost-effective than detection.

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