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FRAUDULENT FINANCIAL REPORTING - Coggle Diagram
FRAUDULENT FINANCIAL REPORTING
Steps to be taken by auditors
report to management or BOD or AC if suspect fraud
report may become qualified
due to limitation of scope if client try to conceal information
adverse, qualified, disagreement with management
appropriate modified or additional procedures, document findings and discuss with management if have material effect on FS
obtain understanding of the nature of the events and circumstances in which it has occurred and gather sufficient information
Fraud Diamond
Incentives or pressure
often due to greed for money
often due to unreasonable target set by management
oppressive condition of economic distress
Opportunities
able to do and hide the wrongdoings
weak internal control
Attitude or rationalization
involve person reconciling his or her behaviour with commonly accepted notions of decency and trust
Capabilities
person position or function that may furnish his ability to create or exploit an opportunity for fraud not available to others