In an organization, who is responsible for the fair presentation of the
What is financial statement fraud (FSF)? Why is FSF often referred to as "cooking the books?"
part of the process of preparing financial statements (e.g., application of GAAP) allows the books to be "cooked?"
Who, Why, and How are FSFs committed?
Who gets hurt from FSF?
Be ready to discuss the five major different ways that FSF
can be committed.
What are some fraud risk factors? What should you be looking for in an
assessment of potential fraud?
During the audit of financial statements, an auditor discovers that
financial statements might be materially misstated due to the existence of
fraud. Be prepared to discuss
(1) the auditor's responsibility according to
SAS No. 99, the PCAOB, and SOX for discovering FSF;
(2) what the auditor
should do if she is precluded from applying necessary audit procedures to
learn more about and document the suspected FSF;
(3) what the auditor should
do if he finds that the fraud material affects the integrity of the financial
What are commonly used analytical techniques (ARPs) are used for financial
statement analysis to detect fraudulent reporting?