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Goals Of Auditing and Risk Assessment

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Goals Of Auditing and Risk Assessment

Describe what fraud is and how it could be conducted.

Organizations' most essential assets in today's tough business climate are their basic

strategy for developing their firm, forthcoming intentions for expanding their sector, and

corporate strategy for establishing an edge over their competitors over industry rivals. Almost

every firm establishes protocols and ensures they are followed to maintain planning-related

information security.

Nevertheless, the business has experienced unauthorized access to confidential

information on hardware matters or data clouds. This unauthorized access is a crime that has cost

the firm a significant amount of financial development and economic worth. According to

Jennings (2014), fraud is a criminal conduct that implies misusing an individual's status, making

false statements, and violating the rights of others for personal gain. It can also be defined as a

purposeful deception to gain an unfair or unlawful advantage or trade predetermined rights with

unauthorized parties.

The fraud might be the result of several causes. The primary reasons are to earn a major

financial profit, harm the image of other firms in the sector, and deceive individuals to get an

advantage over competitors. The ignorance of corporate regulations, insufficient security

deployment in the enterprise, and ignorance of ethical norms provide opportunities for fraudsters

to commit fraud (Kumar, 2009). Security flaws can be identified by acquiring an appropriate

understanding of the system through multiple routes. Then, employing advanced expertise and

fraud techniques, they go after the system. Businesses find it difficult to detect and prevent fraud,

and in most cases, the incidence of scams is found after many months of real fraud.
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Audit detecting that fraud has taken place

Auditing is a reliable and effective means of detecting and preventing fraud. Furthermore,

the type, quality, and specific methods of audits have evolved dramatically over time in order to

increase efficiency and fraud prevention. Businesses must assess their decision controls annually

to guarantee that investigative measures are equally as stringent as preventative controls (Lister,

2007). By taking these precautions, the corporation may be guaranteed that any fraud will be

discovered without requiring extensive external audits. Organizations ought to have

whistleblowing policies in place to promptly identify fraud and safeguard the whistleblower.

Internal audits should engage with senior management to guarantee that the whistleblowing

procedures do not deter employees from coming out at a key time for the organization.

The auditor is responsible for examining the institution's information, documentation, and

operational procedures. He plays a crucial role in identifying materially deceptive representations

in the corporation's financial statements resulting from fraud or errors. Auditors use specialized

audit procedures to spot fraud. To spot fraud, auditors may use various cutting-edge techniques,

including financial predictions, ledger entry analysis, fraud creativity sessions, and large

abnormal transactions (Topor, 2017). The danger of missing a big error by fraud is higher than

the chance of missing one brought on by an error. This is because fraud may be concealed by

elaborate and well-planned schemes, such as theft, purposeful failure to register transactions, or

willful falsification of auditor reports. When accompanied by agreements, such concealment

tactics may be harder to identify. When audit evidence is erroneous, understanding might lead

the auditor to assume it is compelling. The expertise of the perpetrator, the frequency and extent

of the manipulation, the level of cooperation to conceal it, the relative size of the individual

amounts handled, and the functions involved all affect the auditor's capacity to identify fraud.
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As a result, the auditor finds adequate and acceptable audit proof that fraud and mistake

that may be substantial to the accounting records did not occur, or that if they did, the

implications of the fraud are accurately represented in the income statement, and the error is

fixed. Because fraud is frequently accompanied by behaviors deliberately meant to conceal its

presence, the likelihood of identifying mistakes is usually larger than the likelihood of

discovering fraud. Participants in a brainstorming session become aware of how workplace

corruption may be committed and covered up.

It also includes the communication of confidential information between business partners

and unauthorized third parties outside the firm using computers or traditional storage methods.

Auditors used analytical methods and reliable information from the administrator to find

accounting report fraud. A common technique for finding signs of manipulation by fraudsters to

hide the fraud is to evaluate accounting estimates, financial information, and ledger entries. Any

unusual or unnecessary financial activity, and any hardware or software activity outside of work

hours, may be detected by auditors.

Deliberate the previous leak and offer your insights about the root cause.

One of the staff members could have handled the original CD lead, and he ought to know

how crucial it is. The fraud must have been carried out at odd hours at work since the

blackmailer may have used any security system loophole to his advantage. The rivals' potential

to offer a financial advantage had to be the root of the problem. Finding the fraud could be made

easier with a thorough audit and a personal video CCTV system.

Could it be traced back to PVSS?

The employee who perpetrated the scam will assert that he was not deceived and was not

there when the fake occurred. He would assert that he was consistently going to the repository
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location to get papers about him and that he was not seeking anything else. He is not at fault in

this predicament because they have always been devoted to the organization. He will attribute

this fabrication to other employees or strangers to divert attention from himself. He will conclude

by asserting that the Surveillance cameras have documentation showing how he got the CD.

In conclusion, the auditors' objective in their findings is to give a reasonable level of

assurance, not 100 percent, that any substantial misrepresentation arising from fraud or error has

not been made in the financial statements they have reviewed. Even though yearly audits might

help avoid errors and potential neglect, auditors are not in charge of preventing fraud and

mistakes. In their audit summary, the auditor would provide details. Additionally, he will find

that the schedule CD's crucial data is missing, and he will convene a meeting with superiors to

inform them of the fake. He will thoroughly question each employee, and then a comprehensive

QA exercise will follow. The auditor will use PVSS to determine who often accesses the CD

repository. We will keep an eye on all the information, including past acts, personal concerns,

and changes in employee behavior during the past several months. Due to these auditors, the

scammers will be discovered. A suit against the con artists will be filed when the assessor gives

his fact sheet to the accountable team.

References

Jennings, M. M. (2014). Business ethics: Case studies and selected readings. Cengage Learning.

https://books.google.co.ke/books?

hl=en&lr=&id=K4TaAgAAQBAJ&oi=fnd&pg=PR5&dq=Fraud+is+a+criminal+act+that

+involves+abusing+one%27s+position,+making+false+representations,

+and+infringing+on+other+people%27s+rights+for+selfish+enrichment.

+&ots=Aj5zw3Qd_z&sig=R-6c-6uRkbhqCKOBOJ-NS-

mFers&redir_esc=y#v=onepage&q&f=false

Kumar, A. P. (2009). Cyber Law. Mr. Anupa Kumar Patri. https://books.google.co.ke/books?

hl=en&lr=&id=_hQaF37e8BQC&oi=fnd&pg=PA2&dq=The+cluelessness+of+company

+rules,+inadequate+security+deployment+in+the+firm,

+and+ignorance+of+ethical+codes+offer+fraudsters+chances+to+perpetrate+fraud.

+&ots=Eanp63SB04&sig=uHRCxyY0vKmssw9F1s6wOmv-

AHY&redir_esc=y#v=onepage&q&f=false

Lister, L. M. (2007). A practical approach to fraud risk: comprehensive risk assessments can

enable auditors to focus antifraud efforts on areas where their organization is most

vulnerable. Internal auditor, 64(6), 61-66.

Retrieved from; https://shinewingtyteoh.com/auditing-help-detect-prevent-fraud

Topor, D. I. (2017). The auditor's responsibility for finding errors and fraud from financial

situations: case study. International Journal of Academic Research in Accounting, Finance and

Management Sciences, 7(1), 342-352.

Retrieved from;
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https://hrmars.com/papers_submitted/2862/

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