Fraud Risk Factors

Question 1

Management failing to correct known significant deficiencies on a timely basis

Answer 1

Attitude/ rationalizations

Misstatement from fraudulent reporting

Question 2

Inadequate monitoring of controls

Answer 2

Opportunities

Misstatement from Financial Reporting

Question 3

Management has significant financial interest in the entity

Answer 3

Incentives/Pressures

Misstatement from Fraudulent financial reporting

Question 4

Large amounts of Cash on hand or processed

Answer 4

Opportunities

Misstatements arising from Misappropriation of Assets

Question 5

Significant Bank accounts in Tax-haven jurisdictions for which their appears to be no clear business justification

Answer 5

Opportunities

Misstatement from Fraudulent financial reporting

Question 6

Promotions, compensations or other rewards inconsistent with expectations

Answer 6

Incentives/Pressures

Misstatements arising from Misappropriation of Assets

Question 7

Significant related-party transactions not in the ordinary course of business

Answer 7

Opportunities

Misstatement from Fraudulent financial reporting

Question 8

Excessive interest by management in maintaining or increasing the entities stock price

Answer 8

Attitude/ rationalizations

Misstatement from Fraudulent financial reporting

Question 9

New Accounting, Statutory or regulatory requirements

Answer 9

Incentives/Pressures

Misstatement from Fraudulent financial reporting

Question 10

Inadequate physical safeguards over cash, investments or inventory

Answer 10

Opportunities

Misstatements arising from Misappropriation of Assets

Question 11

Ineffective board of directors or audit committee oversight over internal controls

Answer 11

Opportunities

Misstatement from Fraudulent financial reporting