1) Write an opinion about whether you believe auditors should have a public resp
ID: 379017 • Letter: 1
Question
1) Write an opinion about whether you believe auditors should have a public responsibility to “prevent” fraud. Discuss and provide at least 5 good reasons why you think auditors should have a public responsibility to “prevent” fraud or not?
2) Provide and explain 10 specific procedures auditors can perform to detect and prevent the fraud in the article from happening.
Article:
PwC Sued For Missing $2.9 Billion Scam: Do Auditors Have a Public Responsibility To Prevent Fraud? Jonathan Webb. Contributor Opinions expeossed bn Forbas Contributors aro thair own Shuterstock
Explanation / Answer
1)
The auditing is the section which turns the focus of the organizations' assets, strategies used, and achievements; identify weak areas, scam and the final outcome. I believe that it is the auditor’s responsibility to prevent fraud because it will highlight the areas which will definitely bring a loss for the organization and it may lead to a major distraction or break down in the organization.
Five good reasons are as follows:
1. To keep company safe from a loss: Sometimes it happens when the employees or any other related to the organization perform some illegal activities which further get not noticed but through auditing, it can be easily captured.
2. Avoid loss of assets: Company assets are the front-ender which represents the company through assets a company especially represents itself as its work culture are all depending on the assets so it needs to be taken care of properly so that to avoid any loss.
3. Avoid loss in revenue generation: Sometimes it is seen that due to the false putting of data or misconduct at the end year an organization loss a hug some of the money which loss in revenue generation, through auditing it can be easily solved.
4. Keep company policy safe: The organization or its employees sometimes break the law or do a breach of the policy. Through the help of the auditing it can be easily kept proctored and necessary action can be easily taken.
5. Improve business: It really helps the business to grow effectively as it focuses to look after on the change which has made in the organization process, strategies and other objectives. By doing an auditing it will become easy to find out the areas which have followed as per company rules and in this way a better organization can be set up.
2)
10 specific procedures auditors that can help to detect and prevent fraud:
1. Unusual Behavior: Sometimes the individual or group, when involved in any fraud, will show some change in behavior or perform some wrong activities that need to be proctored in the organization.
2. Complaints: The complaints which come in the organization very frequently are required to address them instantly as this can give the sense that something wrong is going on in the organization which needs to be escalated very early.
3. Missing Documents: The documents which are acknowledged that it is not available, the immediate search operation should be generated to keep the documents safe.
4. Common Names and Addresses for Refunds: The workers sometimes make a bogus refund to the employees/ friends instead of customers but this indicates a fraudulent activity in the organization which needs to be addressed very early.
5. Excess Purchases: Sometimes it happens the excess payments are done by purchasing any agent this indicates the fraud in the organization as money is going out without needs this needs to be prevented.
6. Duplicate Payments: Duplicate Payments may sometimes be used to convert for the employee's purpose but it needs to be tracked if any employee found then it should immediately be escalated.
7. Large Payments to Individuals: Excessive high payments to any employee or any individual should indicate the sense of fraudulent activities.
8. Employee Overtime: Sometimes it is seen that after doing overtime the employees are not provided with their extra time bonus as alteration is done on the attendance sheet.
9. Implement Internal Controls: Always it is requiring keeping a control on the day to day activities of the employees and the entire organization to proctor the records and daily report analysis are required to be done to get the internal activities.
10. Live the Corporate Culture: For a fraud-free organization it is required to have a positive working environment with good organization culture, it will automatically prevent an employee from fraud and theft.
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