Many years ago, IT auditors were created. Actually, I was an IT auditor in 1979. But, for the past 40 years, I have been a fraud auditor. Unfortunately, unlike this, the industry does not recognize the title of fraud auditor.
I think the industry has created and recognized the title of fraud auditor. Auditors do not have the inherent risk of fraud or fraudulent audit knowledge or fraudulent skills. I suspect that university courses are not intended to provide this knowledge. If the industry is serious about “more aggressive fraud detection methods,” it should be recognized that this will require auditors to develop and acquire a new set of skills. I recommend that every audit department invest in human fraud risk intelligence.
Internal Audit Standard 2025: Fraud Liability
To start this series, I searched for “New IIA Standards and Fraud Liability Summary”, which is what AI provides.
“The new International IIA (Internal Audit House) Global Internal Audit Standards attach importance to internal auditors’ active assessment and mitigation of fraud risks within an organization, requiring them to take a more proactive approach to fraud detection and incorporate a deeper understanding of potential fraud schemes into strategies outside the audit plan to promote their strategies to promote their overall responsibility to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote strategies to promote , to promote strategies to promote strategies to achieve strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope, to promote strategies to achieve scope; financial control.”
In January, I discussed the concept of “miscuing the risk of fraud.” This month, I will discuss the concept of “more positive fraud methods”
The history of Vona's active fraud detection method
Usually, I start with an internet search, and this time, I will start with my own book.
My first book, Copyright Date 2008, is a book dedicated to the risk of fraud. I also wanted to be the first to publish a book about fraud audits, so I wrote fraud audits to respond to fraud risks in the core business system in 2011. I never thought it would take fourteen years for our profession to use the term “active fraud detection method”. But we are here.
I think, in the case of Messi's 100-day parade, you can say that I am the father of fraud auditing. My son once told me that I created my own career. Enough praise!
Excerpt from my book Fraud Audit: Dealing with the Risk of Fraud in Core Business Systems
“Fraud audit is a process of dealing with the risk of fraud in the context
Review. It can be performed as part of an audit, or the entire audit may
Focus on detecting fraud. It can also be due to allegations or
The desire to detect fraudulent activity in core business systems. For us
The purpose of the discussion, this book will focus on fraud there
Not a specific allegation of fraud. ”
Fraud audit is an application designed to increase the audit procedures
Opportunities to detect fraud in core business systems.
If you search my website for fraud review topics, you will find many blogs on that topic.
How to conduct more aggressive fraud detection methods
It can be said that we are looking for fraud is simply too broad and technically incorrect. Fraud audit is not forensic audit. Forensic words have specific meanings in the legal profession. Fraud audits are not fraud investigations designed for legal systems. Just ask ACFE.
By my definition, fraud audit is the audit process that collects audit evidence to provide opinions on whether there is reliable evidence to indicate the risk of fraud occurring in the company's business system. If so, then the audit suggests to conduct an investigation. If not, can we advise on fraud prevention, detection or deterrent internal controls? In Audit Standard Statement 99, you will find the same basic approach.
Begin active fraud detection methods
Each audit starts with the objectives and scope. In fraud audits, the goal is an account of the fraud risks that are included within your scope. Let me illustrate this concept using Ghost Employe's fraud risk:
The budget owner will lead to a fictitious person being set up on the employee master file, and the budget owner submits the virtual person’s time and attendance records, resulting in the transfer of funds.
Now, let's convert the statement of fraud risk into an audit goal:
Determine if the ghost employee receives a salary payment.
Your previous question was how to detect ghosts in the context of auditing. For reference only, we have written several blogs on this topic.
Establish active fraud auditing methods
We recommend four different approaches to adopt the active fraud audit approach. We believe that the possibility of detecting fraud is the least likely to be increased, and the fourth step is the most likely to detect fraud risk statements.
1. Use fraud scenarios for risk assessment. There is no change in the field work phase. The focus is on the adequacy of internal control design to mitigate fraud. On-site working methods follow traditional internal control methods.
2. Use red flag method in combination with fraud risk declaration method. The sampling phase is random, but the audit procedures include red flags or control red flags related to the fraud risk statement.
3. Integrate fraud testing procedures into internal control methods. This approach is similar to the red flag method, except that we have collected higher levels of qualitative audit evidence to present your opinion. The sampling is random, but the fraud tester is added to the internal control test.
4. Use fraud risk statement-driven approach to fraud auditing. This sampling is based on fraud data analysis, and the test program uses a fraud audit test program. Tests without internal control.
Here are the variables to consider for each approach:
1. Is it possible to define your audit objectives using the fraud scenario or the state of the fraud risk statement.
2. The sampling method is random, unbiased or focused, and is biased against statements about fraud risk.
3. Samples are selected through fraudulent data analysis or manual selection process.
4. Audit testing is internally controlled testing or using fraud auditing procedures.
5. The fraud audit procedure is based on authenticity methods and control methods. The authenticity method collects evidence created and stored outside the control owner. This is the highest rated audit evidence.
6. The opinion is whether there is reliable evidence that a statement of fraud risk is taking place, while internal controls work effectively.
You must understand that fraud audits or active fraud detection methods are another way of thinking. Yes, you will plan, learn about internal controls, select samples, execute test programs, create workbenches, and write reports. However, your success in this work will depend on your ability to understand the proactive fraud detection method, just another way of thinking about the audit process. Good luck!
The word fraud
1. What was the earliest noun “fraud” used? 1650s
2. Does the earliest evidence of fraud in the Oxford English Dictionary come from around? The earliest use of noun fraud was in the Intermediate English Period (1150-1500)
3. Who is the first time using the Oxford English Dictionary to use fraudulent words? Robert Mannyng
4. What is his profession? Poet and historian.
5. How many synonyms can you name a word: fraud? Each website has 188 words.
6. Nine meanings are listed in the OED entry for noun fraud, one of which has been marked as long ago. Which one is outdated? Remember, I will first tell you that fraud is a change in every knowledge. Verb fraud, i.e. “deception” or a trap or a snare? Be crazy!
Fraudulent trivia
“The art of forging literature and historical documents is almost as old as writing. Two thousand years ago, early practitioners imitated the reed pen on papyrus, imitating the writing of Socrates and other ancient authors, whose work was highly valued. Today, most of the motivations for forgetting are still the same thing, which is “doing nothing”. But power”. Source will be disclosed in the March blog.
Can you list some more famous diaries that seem to be fake?
