Control structure

Question 1

control environment

Answer 1

auditing
assessing risk
management

Question 2

accounting system

Answer 2

i.t. systems updated

Question 3

control activitys is

Answer 3

P.A.I.R.S
physical control
Authorisation controls
Information processing systems
review of performance
segregation of duties

Question 4

control issues

Answer 4

failure to discipline fraudster
lack of audit trail
rationalisation

Question 5

internal theft

Answer 5

employees
theft
bad credit

Question 6

extenal fraud

Answer 6

suppliers
bogus vendor payments
purchase of goods for private use

Question 7

fraud triangle of f.s.

Answer 7

pressure : aggressive budget, profit related pay
opportunity: complex or unusual transactions
rationalisation : only trying to help

Question 8

Types of manipulation

aggressive/fictious revenue

Answer 8

premature or fake

Question 9

type of manipulation: overstating stocks

Answer 9

misclassifications

fictitious

Question 10

type of manipulation:understating liabilites

Answer 10

purchase without record

omitting contigent liabilities

Question 11

type of manipulation:offsheet accounting example

Answer 11

enron

Question 12

type of manipulation

Answer 12

incorrect dislcosure

Question 13

warning signs for management

Answer 13

dominance
unethical practices
undue secrecy
highly leveraged rewards

Question 14

warning signs for company -financial practices

Answer 14

profit/credit warning
aggressive forecasting
frequent external auditor changes
results exceed market trend/ industry average

Question 15

remember

Answer 15

weak control + personal issues + industry/environment = fraudulent opportunity