Embedding Fraud Detection in Audit
Auditors today are expected actively participate in prevention and detection of fraud in their organizations. A traditional audit catches less than 4% of existing frauds because audits are designed to test effectiveness of controls and evaluate operating efficiency, not find fraud. Embedding fraud awareness, prevention and detection into auditing requires understanding fraud schemes and fraudster characteristics. This course provides the fundamentals for developing fraud audit programs and incorporating fraud detection into the standard auditing process. This in-depth course looks at the fraud tree and covers common fraud schemes and scenarios to provide the participants with the knowledge needed to start implementing fraud detection into their audit processes immediately. This interactive course will be taught through a combination of lecture, group exercises, and class participation.
Behavioral Objectives Upon completion of this course, participants will be able to:
• Understand fraud fundamentals – fraud triangle, fraud tree
• Learn common fraud schemes and scenarios
• Identify characteristics of fraudsters
• Gain knowledge of prevention and detection programs for
• Implement fraud detection techniques into audit
Detailed Course Outline
Principals for Managing Fraud Risk in an Organization
• Fraud risk assessment
Fraud Risk Assessment Basics
• Fraud Risk Assessment Framework
• Fraud Risk as part of an overall Enterprise Risk Management (ERM) program Updated April 2020
• Potential obstacles and pitfalls for Fraud Risk Assessments
• Best practices in Fraud Risk Assessment
• Internal Audit’s role
• The Fraud Triangle
• ACFE 2018 Report to the Nations
• Fraudsters—characteristics and behaviors
The Fraud Tree: Schemes and Scenarios
• Corruption – Conflicts of interest | Bribery | Illegal gratuities | Economic extortion
• Financial Statement Fraud – Asset and revenue overstatements/understatements
• Asset Misappropriation—Cash
• Asset Misappropriation—Inventory and Other Assets
• Fraudulent Disbursements – Billing | Payroll | Expense reimbursement
Integrating Fraud Auditing into the Internal Audit Program
• Red flags common to various fraud schemes
• Identifying red flags during the audit
• Analyzing red flags for actual fraud
• Fraud auditing vs. controls auditing
Using Data Analytics for Fraud Auditing
• Benford’s law
• Fuzzy analysis
Prevention and Detection Programs
• Control activities
• Human resources
• Anti-fraud training
• Assessing Fraud Prevention programs
• Continuous auditing and monitoring
Fraud Investigations and Response
• Audit’s role in investigations
• Identifying the barriers to effective incident response and how to avoid them
• Obstacles and challenges in investigations
• Fraud incident response checklists
• Evidence and chain of custody
No prerequisites required.
Mary Breslin is the Founder of Verracy Training & Consulting and specializes in Internal Audit transformations, Operational and Financial Auditing, Fraud Auditing & Investigations, and Corporate Accounting.
Ms. Breslin’s career spans over 20 years in Internal Auditing, Management and Accounting for companies such as ConocoPhillips, Barclays Capital, Costco Wholesale, Jefferson Wells and Boart Longyear. With significant International experience, she has managed audit programs in more than 50 countries. Most recently, Ms. Breslin held the title of Vice President and Chief Audit Executive where she transformed a checklist audit function into a value-add audit department which regularly delivered measurable business results through the use of risk-based auditing, data analytics, continuous education and skill development for her leadership team and staff.
Mary was an early adopter of analytics for audit and has been utilizing data analytics in her career in both audit and fraud work for over 15 years. She has transformed the capabilities of audit functions using data analytics programs using ACL, IDEA and Arbutus Analyzer. Through her expertise and guidance, she has helped large global organizations leverage analytics to significantly increase coverage, automate continuous auditing and monitoring, and actively fight fraud.
Additionally, Ms. Breslin has extensive Fraud Audit and Investigation experience and has conducted major fraud investigations on multiple continents including large scale federal cases domestically. She has developed and implemented fraud auditing programs in various industries focused on both accounting and operations.
Ms. Breslin attended Rutgers University and received her BS in accounting, and an MBA from the University of Phoenix while living and working overseas. She is a Certified Internal Auditor (CIA), and Certified Fraud Examiner (CFE). She maintains memberships in the Institute of Internal Auditors (IIA), American Institute of Certified Public Accountants (AICPA), ISACA, the Society of Corporate Compliance (SCCE), and the Association of Certified Fraud Examiners (ACFE) and is currently an instructor and conference speaker for the IIA, The ACFE and ISACA.
TAC Rule 523.142(g) requires the CPE Sponsor to monitor individual attendance and assign the correct number of CPE credits. Participants will be asked to document their time of arrival and departure in compliance with this Rule. Additionally, attendance will be monitored throughout the day and CPE certificates will reflect actual attendance of each participant.
If you are making travel plans to come to Austin, we recommend making "refundable" air and hotel reservations or waiting until 14 days before the class to actually book your reservations. Courses are occasionally canceled or rescheduled due to low enrollment. We determine whether a course has enough participants 16 days prior to the course date. If we cancel or reschedule, we will email the participant and his or her billing contact no later than 14 days before the original class date.
Vending machines with Coca-Cola products and various snack items are available. There is also a refrigerator and microwave in our coffee bar area. Feel free to bring in your own drinks and food if you prefer.
You might want to bring a light sweater or jacket, as room temperatures vary.
To see answers to our Frequently Asked Questions, visit http://www.sao.texas.gov/training/faq.html.