Escolar Documentos
Profissional Documentos
Cultura Documentos
Trimester : VI
Truth and fairness of the trading results as depicted in profit & loss account Adequacy of information required to be disclosed Compliance and statutory requirements Accuracy and reliability of books of accounts and underlying records
b)
c)
Definition of Fraud
Fraud can be defined as :
the successful practice of deception, with the intention of cheating another person. It involves trickery and deceitful action.
Fraud maybe named in other words like embezzlement, defalcation and misappropriation or manipulation.
Overstatement of stock
Overstatement of sales Understatement of purchases
4.
5. 6.
Manipulation of expenses
Overstatement of Assets Understatement of Liabilities
7.
8. 9. 10. 11.
Kiting
Intentional errors in balancing cash book
17.
Forgery
Types of Errors
1.
2.
3.
4.
Quality of Management
a) Mgt is dominated by one person or a small group b) Internal control is absent or weak c) There is high turnover of accounting staff d) The accounts dept is overstaffed e) Auditors and lawyers are changed frequently
Problems in Audit :
a) There are inadequate records, incomplete files, untallied trial balances b) Vouchers are not available or not duly authorised or supporting documents are altered. c) Third party confirmations are not available or are absent, differences in quantity reconciliations, or unexplainable changes in ratios d) there is lack of or inadequate explanations from management
good accounting and internal control Incidental Objective of Audit to ensure audit is free from major errors and frauds Possibility of Non detection not failure in duty as long as reasonable care has been taken take additional steps to detect them and ensure proper closure or disclosure CARO 2003 reporting requirements for fraud or error in the new format of CARO 2003.