Course Description
Financial statement fraud continues to capture news headlines around the world and the question continually asked is: “Where were the auditors?” This course will help both internal and external auditors gain an understanding of financial statement fraud, how it is committed, the motivation behind it, and, most importantly, how to identify it. The course will provide participants with the fraud knowledge and forensic accounting techniques necessary to identify financial statement fraud where it is occurring. Real-life comprehensive fraud case studies and the forensic accounting and fraud examination techniques used to identify and quantify the frauds will be used throughout the course to further the learning process. Participants will work through fraud case study examples and exercises.
This interactive course will be taught through a combination of lecture, group exercises, and class participation.
Learning Objectives
- Recognize the most common financial statement fraud schemes
- Identify the red flags of financial statement fraud
- Learning how to identify the red flags associated financial statement fraud
- Understand the fraud implications of emerging issues in financial reporting
- Understanding fraud fundamentals used to identify fraud within your organization.
- Learning the techniques most commonly used to detect financial statement fraud
Course Outline
Introduction to Financial Statement Fraud
- Definitions of fraud
- Fraudster characteristics
- Fraud basics
Auditor Responsibility for Fraud
- Auditing standards for fraud
- Fraud programs and governance
- Fraud Risk Assessments
Improper Revenue Recognition
- Revenue recognition/li>
- Long-term contracts
- Channel stuffing
- Sales with conditions
- Fictitious sales/revenue
- Contingencies
- Related parties
- Indirect methods of revenue manipulation
Improper Deferral of Costs and Expenses
- Accounting method changes
- No recording
- Concealment of costs
Improper Asset Valuation
- Accounts Receivable
- Inventory
- Fixed assets
- Business combinations
Improper Recording of Liabilities
- Changes in accounting
- Failure to record
- Off-balance sheet entities
Disclosures
- Significant changes and events
- Related-party transactions
- Management discussion and analysis
Financial Statement Fraud Detection Methods
- Ratios
- Comparative techniques
- Cash flow
- Regression analysis
- Benford’s law
- Beneish M-Score
- Damerau-Levenshtein—fuzzy logic
Additional Information
Who Should Attend
- Internal audit staff and management
- Financial auditors
- Internal control professionals
- Accounting staff
Learning Level
Intermediate
Delivery
Group Live or Group Internet-Based
Field
Auditing
Advanced Preparation
None
Recommended Prerequisites
Working knowledge of accounting, fraud basics, and financial statements.
Session Duration
On Site: 2 days
CPE Credits: 16