Chopi CFFE Fraud Prevention and Detection Notes

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CFFE Module 3 Notes Pdf

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to effectively prevent and detect fraud in various settings.

LEARNING OUTCOME
A candidate who passes this paper should be able to:

• Design and implement fraud prevention and detection controls
• Develop a fraud/corruption policy
• Develop fraud prevention programs
• Conduct a fraud prevention health check up
• Provide support to the various parties with responsibility for fraud

1. Introduction to Criminology
   1.1 Understanding criminal behaviour
   1.2 Theories of crime causation
   1.3 White collar crime
   1.4 White collar crime and crimes of the middle class
   1.5 Occupational crime and related criminology theories
   1.6 Organisational crime and the related criminology theories
   1.7 Fraud/Corruption study – cost, how fraud is committed, detection, victims,
   perpetrators, red flags, presence/absence of internal controls and commission of
   fraud
   1.8 Perpetrators of fraud/corruption and white collar crime.

2. Introduction to Fraud Prevention and Detection
   2.1 Introduction fraud and corruption
   2.2 Red flags of fraud and corruption
   2.3 Effects of fraud and corruption
   2.4 Why fraud occur and the root causes of fraud
   2.5 Fraud prevention versus internal controls
   2.6 Types of basic controls
   2.7 Types of fraud related controls
   2.8 Strong and weak controls versus effective controls

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3. Fraud Prevention Programs
   3.1 Promoting fraud prevention to board and management
   3.2 Anti-Fraud Policy
   3.3 Increasing the perception of detection
   3.4 Analytical review procedures
   3.5 Fraud assessment
   3.6 Surprise audits
   3.7 Proactive forensic audits and fraud audits
   3.8 Fraud awareness training and education
   3.9 Reporting programs
   3.10 Enforcement of mandatory vacations
   3.11 Job rotation policy
   3.12 Effective management oversight
   3.13 Tone at the top
   3.14 Fair personnel practices and employee support programs
   3.15 Open door policies

3.16 Organisation structure
3.17 Ethics based metrics and performance goals and evaluation
3.18 Response to fraudulent activities

4. Corporate Governance – Responsibility for Fraud Prevention
   4.1 The role of corporate governance in fighting fraud and corruption
   4.2 Principles of corporate governance
   4.3 Organisation of Economic Corporation Development (OECD) Principles of
   corporate governance
   4.4 Treadway commission
   4.5 Mwongozo – The code of governance for state corporations

5. Management – Fraud Related Responsibilities
   5.1 Vicarious or imputed liabilities
   5.2 COSO – internal controls – Integrated framework
   5.3 Anti – Fraud and corruption policy
   5.4 Effective compliance and ethics program
   5.5 Fraud prevention health check up

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6. Auditors’ Fraud Related Responsibilities
   6.1 International standards on auditing (ISA240) – Auditor’s Responsibilities Relating
   to Fraud in an audit of financial Statements
   6.2 International standards on auditing (ISA 315 Understanding the entity and its
   environment
   6.3 International standards on auditing (ISA 200) Professional Scepticism
   6.4 International standards on auditing (ISA 330)
   6.5 The international organisation of securities commissions
   6.6 The public interest oversight board
   6.7 Institute of internal auditors – Professional Practice Standards related to fraud –
   Standard 1210 – 2130
   6.8 Internal auditor’s role in fighting fraud
   6.9 The auditors’ (internal and external) responsibility for auditing value for money in
   government audits

7. Ethics for Forensic Auditors/Investigators
   7.1 Introduction to ethics
   7.2 General ethics
   7.3 Professional ethics
   7.4 Morality, ethics and legality
   7.5 Examiners/investigators code of professional ethics
   7.5.1 Commitment to professionalism and diligence
   7.5.2 Illegal, unethical and conflict of interest
   7.5.3 Integrity
   7.5.4 Complying with lawful orders
   7.5.5 Expression of opinions/ guilt or innocence
   7.5.6 Confidentiality
   7.5.7 Prohibition of concealment of material matters
   7.5.8 Continuous practical education

8. Case Study
   The candidate will be required to do case study on:

• Conduct a fraud prevention health check on a sample origination.
• Score the seven criteria of evaluation
• Identify the fraud prevention gaps

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