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J o urn al o f A cco unta n cy A udit o rs ’ R esp onsib ilit y f o r F ra u d D ete ctio n.
S AS n o. 9 9 in tr o duce s a n ew e ra in a udit o rs ’ r e quir e m ents .
B Y M IC HAEL R AM OS J anuary 1 , 2 003 A udit o rs w ill e nte r a m uch e xpanded a re na o f p ro cedure s to d ete ct fr a ud a s th ey im ple m ent S AS n o. 9 9. T he n ew s ta ndard a im s to h ave th e a udit o r’s c onsid era tio n o f fr a ud s eam le ssly b le nded in to th e a udit p ro cess a nd c ontin ually u pdate d u ntil th e a udit ’s c om ple tio n. S AS n o. 9 9 d escrib es a p ro cess in w hic h th e a udit o r ( 1 ) g ath ers in fo rm atio n n eeded to i d entif y r is ks o f m ate ria l m is sta te m ent d ue to fr a ud, ( 2 ) a ssesses th ese r is ks a fte r ta kin g in to a ccount a n e valu atio n o f th e e ntit y ’s p ro gra m s a nd c ontr o ls a nd ( 3 ) r e sponds to th e r e sult s . U nder S AS n o. 9 9, y ou w ill g ath er a nd c onsid er m uch m ore in fo rm atio n to a ssess fr a ud r is ks th an y ou h ave in th e p ast. ( F or th e te xt o f th e n ew s ta ndard , s ee O ff ic ia l R ele ases, p age 1 05.) P R O FE SSIO NAL S K EPTIC IS M S AS n o. 9 9 r e m in ds a udit o rs th ey n eed to o verc om e s om e n atu ra l te ndencie s— such a s o verre lia nce o n c lie nt r e pre senta tio ns— and b ia ses a nd a ppro ach th e a udit w it h a s keptic al a ttit u de a nd q uestio nin g m in d. A ls o e ssentia l: T he a udit o r m ust s et a sid e p ast r e la tio nship s a nd n ot a ssum e t h at a ll c lie nts a re h onest. T he n ew s ta ndard p ro vid es s uggestio ns o n h ow a udit o rs c an l e arn h ow to a dopt a m ore c rit ic al, s keptic al m in ds et o n th eir e ngagem ents , p artic ula rly d urin g a udit p la nnin g a nd th e e valu atio n o f a udit e vid ence. N EW R EQ UIR EM EN T: D IS C USSIO N A M ONG E N G AG EM EN T P ER SO NNEL S AS n o. 9 9 r e quir e s t h e a udit te am to d is cuss th e p ote ntia l fo r a m ate ria l m is sta te m ent in th e fin ancia l s ta te m ents d ue to fr a ud b efo re a nd d urin g th e in fo rm atio ng ath erin g p ro cess. T his r e quir e d “ b ra in sto rm in g” is a n ew c oncept in a udit in g lit e ra tu re , a nd e arly in th e a doptio n p ro cess fir m s w ill n eed to d ecid e h ow b est to im ple m ent th is r e quir e m ent in p ra ctic e. K eep in m in d t h at b ra in sto rm in g is a r e quir e d p ro cedure a nd s hould b e a pplie d w it h th e s am e d egre e o f d ue c are a s a ny o th er a udit p ro cedure . T here a re tw o p rim ary o bje ctiv es o f t h e b ra in sto rm in g s essio n. T he fir s t is s tr a te gic in n atu re , s o th e e ngagem ent te am w ill h ave a g ood u nders ta ndin g o f i n fo rm atio n th at s easoned te am m em bers h ave a bout th eir e xperie nces w it h th e c lie nt a nd h ow a fr a ud m ig ht b e p erp etr a te d a nd c onceale d. T he s econd o bje ctiv e o f th e s essio n is to s et th e p ro per “ to ne a t th e to p” fo r c onductin g th e e ngagem ent. T he r e quir e m ent th at b ra in sto rm in g b e c onducte d w it h a n a ttit u de th at “ in clu des a q uestio nin g m in d” is a n a tte m pt to m odel th e p ro per d egre e o f p ro fe ssio nal s keptic is m a nd “ s et” th e c ult u re fo r th e e ngagem ent. T he b elie f is th at s uch a n a udit e ngagem ent c ult u re w ill i n fu se th e e ntir e e ngagem ent, m akin g a ll a udit p ro cedure s th at m uch m ore e ff e ctiv e. T he m ere fa ct th e e ngagem ent t e am h as a s erio us d is cussio n a bout th e e ntit y ’s s usceptib ilit y t o fr a ud a ls o s erv es to r e m in d a udit o rs th at th e p ossib ilit y d oes e xis t in e very e ngagem ent— in s pit e o f a ny h is to ry o r p re conceiv ed b ia ses a bout m anagem ent’s h onesty a nd i n te grit y . Y ou s hould n ote th at S AS n o. 9 9 d oes n ot r e str ic t b ra in sto rm in g to th e p la nnin g p hase o f th e a udit p ro cess. B ra in sto rm in g c an b e u sed in c onju nctio n w it h a ny p art o f th e i n fo rm atio n g ath erin g p ro cess. A udit o rs g ath er d ata c ontin uously th ro ughout th e e ngagem ent, s o l o ok fo r o pportu nit ie s to b ra in sto rm a ll th e w ay t h ro ugh. S om e a udit o rs m ay c hoose to m eet fo r d is cussio ns a gain n ear th e c onclu sio n o f th e a udit t o c onsid er th e fin din gs a nd e xperie nces o f a ll t e am m em bers a nd w heth er th e te am ’s a ssessm ent a bout a nd r e sponse to th e r is k o f m ate ria l m is sta te m ent d ue to fr a ud w ere a ppro pria te . T he n ew fr a ud s ta ndard , S ta te m ent o n A udit in g S ta ndard s n o. 9 9, C onsid era tio n o f F ra ud in a F in ancia l S ta te m ent A udit , i s th e c orn ers to ne o f th e A IC PA’s c om pre hensiv e a ntif r a ud a nd c orp ora te r e sponsib ilit y p ro gra m . T he g oal o f th e p ro gra m is to r e build th e c onfid ence o f i n vesto rs in o ur c apit a l m ark ets a nd r e esta blis h a udit e d fin ancia l s ta te m ents a s a c le ar p ic tu re w in dow in to c orp ora te A m eric a. F ro m p ro vid in g C PA s w it h c la rif ie d a nd f o cused a udit in g g uid ance to e sta blis hin g a n ew in stit u te fo r fr a ud s tu die s, th e A IC PA is d ete rm in ed to h elp r e duce th e in cid ence o f fin ancia l f r a ud. T his a rtic le is a dapte d fr o m c hapte r 2 o f F ra ud D ete ctio n in a G AAS A udit — SAS N o. 9 9 I m ple m enta tio n G uid e b y M ic hael R am os, w hic h w as p ublis hed b y th e A IC PA c oncurre nt w it h t h e is suance o f th e n ew fr a ud s ta ndard . T his n onauth orit a tiv e p ra ctic e a id p ro vid es a n i n d epth , s ectio nb ys ectio n e xpla natio n a s w ell a s im ple m enta tio n g uid ance a nd p ra ctic e t ip s fo r th e s ta ndard . T o o rd er th e b ook ( p ro duct n o. 0 06613) b y te le phone, c all th e A IC PA a t 8 887 777 077; to o rd er o nlin e g o to w ww.C PA 2biz .c om ( h ttp ://w ww.c pa2biz .c om /) . I n a ddit io n to b ra in sto rm in g, S AS n o. 9 9 r e quir e s a udit te am m em bers to c om munic ate w it h e ach o th er th ro ughout th e e ngagem ent a bout th e r is ks o f m ate ria l m is sta te m ent d ue to f r a ud. In f a ct, th e s ta ndard r e quir e s th e a udit o r w it h fin al r e sponsib ilit y fo r th e a udit to d ete rm in e w heth er th ere h as b een a ppro pria te c om munic atio n a m ong te am m em bers th ro ughout t h e e ngagem ent.
S TR UCTU RIN G A N E FFE C TIV E B RAIN STO RM IN G S ESSIO N S plit it in to t w o p arts . T he m ain o bje ctiv e o f b ra in sto rm in g is to g enera te id eas a bout h ow fr a ud m ig ht b e c om mit te d a nd c onceale d a t th e e ntit y . T hat is a ll th at S AS n o. 9 9 r e quir e s. A s a p ra ctic al m atte r, s om e e ngagem ent t e am s m ay c hoose to d is cuss h ow th ey m ig ht r e spond to th e i d entif ie d r is ks. D ete rm in e a r e aso nab le t im e lim it . C onsult a nts a nd b usin ess o w ners w ho p artic ip ate r e gula rly in b usin ess b ra in sto rm in g s essio ns s uggest th at a g ood s essio n la sts a bout a n h our. A fte r t h at, th e e nerg y b egin s to fa de a nd th e l a w o f d im in is hin g r e tu rn s s ets in . C onsid er a ssig nin g “ h om ew ork .” T he s essio n w ill b e m uch m ore p ro ductiv e if a ll m em bers h ave a s im ila r le vel o f u nders ta ndin g a bout th e c lie nt, th e n atu re o f it s b usin ess a nd it s c urre nt fin ancia l p erfo rm ance. F or a udit o rs b ra in sto rm in g a bout fr a ud m atte rs , it m ay b e b enefic ia l to p erfo rm a naly tic al, fa ct b ased r e searc h b efo re th e s essio n. I n s tr u ctu rin g y our s essio n, it w ill h elp to c onsid er th e c hara cte ris tic s o f th e fr a ud tr ia ngle . F or e xam ple , y ou m ig ht d is cuss th e in centiv es/p re ssure s th at m ay e xis t a t th e e ntit y o r th e o pportu nit ie s m anagem ent o r e m plo yees h ave to c om mit fr a ud. Y ou a ls o m ig ht d is cuss o bserv atio ns a bout a ttit u de/r a tio naliz atio n th at m ay in dic ate th e p re sence o f r is k a t th e c om pany. D escrib e t h e o bje ctiv e o f t h e s essio n in la n guag e p eo ple c an r e la te t o . T o h elp g enera te c re ativ e, p ra ctic al id eas, p ose q uestio ns p eople c an m ore e asily u nders ta nd, s uch a s th e f o llo w in g:
I f y ou w ere th e b ookkeeper fo r th e e ntit y , h ow c ould y ou e m bezzle fu nds a nd n ot g et c aught? If y ou w ork ed o n th e lo adin g d ock, h ow c ould y ou s te al in vento ry ? If y ou o w ned th is c om pany, h ow m ig ht y ou m anip ula te th e fin ancia l s ta te m ents to im pre ss b ankers ? S O ME B RAIN STO RM IN G R ULE S Y ou m ig ht c onsid er s ettin g g ro und r u le s to h elp y ou a chie ve y our o bje ctiv e. H ere a re s om e e xam ple s. N o id eas o r q uestio ns a re d um b. P re ju dgin g q uestio ns b y la belin g th em “ d um b” is o ne s ure w ay to s tif le th e c ontr ib utio n o f id eas. N o o ne “ o w ns” id eas. W hen in div id uals b ecom e p ers onally in veste d in a n id ea, th ey te nd to “ fig ht” fo r it a s lo ng a s p ossib le . T here m ay b e a tim e a nd a p la ce fo r b attlin g o ver th e v alid it y o f a n id ea, b ut a b ra in sto rm in g s essio n is n ot o ne o f th em . T here is n o h ie ra rc hy. T he w orld o f id eas d oes n ot r e cogniz e r a nk, e xperie nce o r c om pensatio n le vel. C re ate a n e nvir o nm ent in w hic h s enio r te am m em bers s hare in fo rm atio n w it h out d om in atin g th e d is cussio n a nd ju nio r m em bers fe el “ s afe ” c ontr ib utin g th eir o w n id eas. E xcessiv e n ote ta kin g is n ot a llo w ed. A b ra in sto rm in g s essio n is a n in tu it iv e, s ponta neous p ro cess. E xcessiv e n ote t a kin g is a b arrie r to th is p ro cess. O BTA IN IN FO RM ATIO N T O ID EN TIF Y T H E R IS K S O F F R AUD S AS n o. 9 9 s ig nif ic antly e xpands th e n um ber o f in fo rm atio n s ourc es fo r id entif y in g r is ks o f fr a ud. It p ro vid es g uid ance o n o bta in in g i n fo rm atio n fr o m M anagem ent a nd o th ers w it h in th e o rg aniz atio n. A naly tic al p ro cedure s.
C onsid era tio n o f fr a ud r is k fa cto rs .
O th er s ourc es.
M an ag em en t. T he n ew s ta ndard lis ts s evera l i t e m s y ou s hould a sk a bout th at r e la te to m anagem ent’s a w are ness a nd u nders ta ndin g o f fr a ud, fr a ud r is ks a nd th e s te ps ta ken to m it ig ate r is ks. S evera l o f th ese in quir ie s w ere n ot r e quir e d u nder p re vio us s ta ndard s. S om e in quir ie s a re r e la tiv ely s tr a ig htfo rw ard , b ut o th ers m ay r e quir e y ou t o “ e ducate ” m anagem ent a bout th e c hara cte ris tic s o f fr a ud, t h e n atu re o f fr a ud r is ks a nd th e ty pes o f p ro gra m s a nd c ontr o ls th at w ill d ete r a nd d ete ct fr a ud. T he g uid ance c onta in ed in S AS n o. 9 9 p ro vid es y ou w it h th e b ackgro und n ecessary to d is cuss th ese m atte rs . O th ers . T he S AS r e quir e s y ou to m ake in quir ie s o f th e a udit c om mit te e ( e ven if it is n ot a ctiv e), in te rn al a udit p ers onnel ( if a pplic able ) a nd o th ers a bout th e e xis te nce o r s uspic io n o f fr a ud a nd to in quir e a s to e ach i n div id ual’s v ie w s a bout th e r is ks o f fr a ud. “ O th ers ” c an i n clu de th ose e m plo yees w ho a re o uts id e th e fin ancia l r e portin g p ro cess. F or th e m ost p art, a udit o rs te nd t o r e str ic t th eir c lie nt in quir ie s to p ers onnel d ir e ctly i n volv ed in th e fin ancia l re portin g p ro cess. T his a ppro ach i s a ppro pria te fo r m atte rs o f w hic h a ccountin g p ers onnel h ave d ir e ct k now le dge— fo r e xam ple , h ow tr a nsactio ns a re p ro cessed o r c ontr o lle d. H ow ever, it is le ss e ff e ctiv e to a sk a ccountin g p ers onnel a bout m atte rs o f w hic h th ey d o n ot h ave fir s t h and k now le dge ( fo r e xam ple , th e p ro cedure s u sed t o e xam in e, c ount a nd r e ceiv e it e m s in to in vento ry ). C rit ic s o f th e a udit p ro cess fr e quently c it e th e a udit o r’s r e lu cta nce to m ake in quir ie s o uts id e o f th e a ccountin g d epartm ent a s a r e ason fo r th e la ck o f th e in d epth u nders ta ndin g n ecessary to p la n a nd p erfo rm a n e ff e ctiv e a nd e ff ic ie nt a udit . S AS n o. 9 9 is th e f ir s t s ta ndard th at r e quir e s a udit o rs to m ake in quir ie s o f “ o th ers w it h in th e e ntit y ,” s uch a s O pera tin g p ers onnel n ot d ir e ctly in volv ed in th e f in ancia l re portin g p ro cess. P eople w it h k now le dge o f c om ple x o r u nusual t r a nsactio ns. In h ouse le gal c ounsel.
F urth er, y ou s hould n ot r e str ic t y our in quir ie s to s enio r m anagem ent. T he s ta ndard s uggests m akin g in quir ie s o f p ers onnel a t v ario us l e vels w it h in th e o rg aniz atio n. T hese a re tw o p rim ary o bje ctiv es in m akin g s uch in quir ie s.
T o o bta in f ir s th an d k n ow le d ge o f f r a u d. F ra ud c an h appen in a ny d epartm ent a nd a t a ny le vel w it h in th e o rg aniz atio n. S om eone in th e e ntit y m ay h ave o bserv ed a p ers on c om mit tin g o r c oncealin g a fr a ud. O fte n, th ose w it h k now le dge o f a fr a ud h ave s ta te d, a fte r th e fa ct, th at th ey w ould h ave to ld s om eone, “ b ut n obody a sked.” S AS n o. 9 9 i n cre ases th e lik elih ood th at t h e a udit o r w ill n ow b e th at “ s om eone” w ho a sks. T o c o rro bora te o r le n d p ers p ectiv e t o r e p re sen ta tio ns o f o th ers . O pera tin g p ers onnel c an c orro bora te r e pre senta tio ns m ade b y o th ers o r p ro vid e a d if f e re nt p ers pectiv e o n h ow t h in gs “ re ally w ork .” F or e xam ple , a ccountin g d epartm ent p ers onnel m ay b e a ble to p ro vid e y ou w it h th e r e com mended c ontr o l p ro cedure s r e la tin g to th e s afe guard in g o f in vento ry , b ut o pera tio nal p ers onnel c an t e ll y ou h ow th e c ontr o l p ro cedure s a re a pplie d in p ra ctic e a nd w hen, if e ver, th ose c ontr o ls a re o verrid den o r c ir c um vente d. T he s ta ndard a llo w s y ou to u se c onsid era ble ju dgm ent in d ete rm in in g to w hic h e m plo yees w it h in th e o rg aniz atio n y ou s hould d ir e ct y our in quir ie s a nd w hat q uestio ns y ou s hould a sk. E VEN M ORE IN Q UIR IE S T he n ew s ta ndard o blig ate s y ou to in quir e o f m anagem ent a nd o th ers in th e e ntit y . H ow ever, it d oes n ot r e str ic t y ou to m akin g o nly th ose in quir ie s. In fa ct, it e ncoura ges y ou to m ake a ddit io nal in quir ie s in o rd er to g ath er o r c orro bora te a w id e v arie ty o f in fo rm atio n th at c an h elp y ou id entif y o r a ssess r is ks o f m ate ria l m is sta te m ent d ue to fr a ud. M any o f t h e q uerie s r e la te d t o th ese m atte rs s hould b e s ubm it te d to p ers onnel o uts id e o f m anagem ent o r th e a ccountin g d epartm ent. F or e xam ple , y ou m ay w is h to u se in quir ie s t o I d entif y th e p re sence o f th e fr a ud tr ia ngle c hara cte ris tic s. U nders ta nd th e p olic ie s, p ro cedure s a nd c ontr o ls fo r r e cord in g jo urn al e ntr ie s o r o th er a dju stm ents . Id entif y c ir c um sta nces u nder w hic h m anagem ent h as o r m ay o verrid e in te rn al c ontr o ls . U nders ta nd p olic ie s a nd p ro cedure s r e la te d to r e venue r e cognit io n. U nders ta nd th e b usin ess r a tio nale fo r s ig nif ic ant u nusual tr a nsactio ns. A skin g th e s am e q uestio n o f d if f e re nt p eople c an in cre ase th e e ff e ctiv eness o f y our in quir ie s, a s y ou c an c om pare a nsw ers to id entif y c onsis te ncie s o r a nom alie s in th e r e sponses. P LA NNIN G A NALY TIC AL P R O CED URES O ne o f th e r e asons a udit o rs fa il to d ete ct m ate ria l m is sta te m ents c aused b y fr a ud is th at th ey te nd to l o ok a t c urre nt n um bers in is ola tio n fr o m th e p ast o r o th er r e le vant in fo rm atio n. F or th at r e ason, S AS n o. 9 9 s ays th e a udit o r s hould c onsid er th e r e sult s o f a naly tic al p ro cedure s i n id entif y in g th e r is ks o f m ate ria l m is sta te m ent c aused b y f r a ud, a nd th e s ta ndard p ro vid es a lis t o f p ro cedure s a udit o rs c an e m plo y th at m ay in dic ate th e p re sence o f s uch r is ks. F R AUD R IS K F A CTO RS A f r a ud r is k fa cto r is a n e vent o r c ondit io n th at tr a cks th e t h re e c ondit io ns o f th e fr a ud tr ia ngle . A lt h ough fr a ud r is k f a cto rs d o n ot n ecessarily in dic ate th at fr a ud e xis ts , th ey o fte n a re w arn in g s ig ns w here it d oes. L ik e S AS n o. 8 2, th is s ta ndard lis ts n um ero us illu str a tiv e fr a ud r is k fa cto rs to h elp th e a udit o r in c onsid erin g w heth er fr a ud r is ks a re p re sent. H ow ever, in S AS n o. 9 9, th ese illu str a tiv e fr a ud r is k fa cto rs h ave b een r e org aniz ed to tr a ck th e fr a ud t r ia ngle . A udit o rs a re c autio ned n ot to th in k th at t h ese fr a ud r is k fa cto rs a re a ll in clu siv e. In fa ct, r e searc h h as fo und th at a udit o rs w ho u sed o pene nded q uestio ns th at e ncoura ged th em to d evelo p t h eir o w n fr a ud r is k fa cto rs o utp erfo rm ed th ose w ho r e lie d o n a c hecklis t b ased o n lo okin g o nly fo r th e illu str a te d fr a ud r is k f a cto rs . D ESIG NIN G A UDIT P R O CED URES T O ID EN TIF Y F R AUD R IS K S S AS n o. 9 9 s ays, “ W hen o bta in in g in fo rm atio n a bout th e e ntit y a nd it s e nvir o nm ent, t h e a udit o r s hould c onsid er w heth er th e in fo rm atio n i n dic ate s th at o ne o r m ore fr a ud r is k fa cto rs a re p re sent.” A s a p ra ctic al m atte r, th e a pplic atio n o f S AS n o. 2 2, P la nnin g a nd S uperv is io n, r e la tin g to a udit p la nnin g, a nd S AS n o. 5 5, C onsid era tio n o f In te rn al C ontr o l in a F in ancia l S ta te m ent A udit , a s a m ended, r e la tin g to in te rn al c ontr o ls a nd th e o th er s ectio ns o f S AS n o. 9 9, s hould a llo w y ou to id entif y th e b ro ad c ate gorie s o f f r a ud r is ks r e la te d to in centiv e/p re ssure a nd o pportu nit y . R egard in g fr a ud r is k fa cto rs r e la tin g to a ttit u de/r a tio naliz atio n, y ou c annot p ossib ly k now w it h c erta in ty a p ers on’s e th ic al s ta ndard s a nd b elie fs . H ow ever, d urin g th e c ours e o f y our e ngagem ent, y ou m ay b ecom e a w are o f c ir c um sta nces th at in dic ate th e p ossib le p re sence o f a n a ttit u de o r a bilit y to r a tio naliz e th at y ou c onsid er to b e a f r a ud r is k. F or e xam ple , a r e currin g a tte m pt b y m anagem ent t o ju stif y m arg in al, in appro pria te a ccountin g o n th e b asis o f m ate ria lit y a nd a s tr a in ed r e la tio nship b etw een m anagem ent a nd th e c urre nt o r p re decessor a udit o r a re fr a ud r is ks r e la tin g to fr a udule nt fin ancia l r e portin g. S AS n o. 9 9 r e quir e s y ou to c onsid er o th er in fo rm atio n th at m ay b e h elp fu l in id entif y in g th e r is ks o f m ate ria l m is sta te m ent d ue to fr a ud. T his o th er d ata c an b e g le aned d urin g T he e ngagem ent te am ’s b ra in sto rm in g s essio n. C lie nt a ccepta nce a nd c ontin uance p ro cedure s. R evie w s o f in te rim fin ancia l in fo rm atio n. C onsid era tio n o f in here nt r is ks a t th e a ccount o r tr a nsactio n le vel. I D EN TIF Y A ND A SSESS F R AUD R IS K S T he k ey to d esig nin g e ff e ctiv e a udit te sts i s to p erfo rm a n e ff e ctiv e s ynth esis o f th e id entif ie d r is ks. S ynth esis is d efin ed a s “ th e a ssem blin g o f a c om ple x w hole fr o m o rig in ally s epara te p arts .” T hat is w hat y ou m ust d o a fte r y ou id entif y r is ks. S AS n o. 9 9 r e quir e s a udit o rs to a ssess fr a ud r is ks, b ut o ne o f th e p ro ble m s p ra ctit io ners h ave h ad w it h th e p re vio us s ta ndard o n f r a ud is th at th ey m is ta kenly b elie ved “ a ssessm ent” to m ean th ey s hould d escrib e th e r is k a s h ig h, m ediu m o r lo w . T hat is n ot h ow “ a ssessm ent” is m eant to b e in te rp re te d in S AS n o. 9 9. T he f o llo w in g illu str a tio n m aps th e a udit p ro cess fr o m r is k i d entif ic atio n to a udit te st d esig n. “ S ynth esis ” is th e e le m ent th at lin ks th e tw o e nds o f th e p ro cess. E lim in ate r is k s ynth esis fr o m th e p ro cess s te p, a nd th e c hain is b ro ken— th ere is n o lin k to r is k id entif ic atio n. O nce th at lin k b etw een r is k i d entif ic atio n a nd a udit te st d esig n is e lim in ate d, it is n ot s urp ris in g th at th e d esig n o f a udit te sts is n ot e ff e ctiv e in h elp in g a udit o rs id entif y r is ks Y our g oal is to “ a ssess” o r to s ynth esiz e th e id entif ie d r is ks to d ete rm in e w here th e e ntit y is m ost v uln era ble to m ate ria l m is sta te m ent d ue to fr a ud, th e ty pes o f fr a uds th at a re m ost l ik ely to o ccur a nd h ow th ose m ate ria l m is sta te m ents a re l ik ely to b e c onceale d. L IN KIN G A UDIT P R O CED URES T O ID EN TIF IE D R IS K S O F M ATE R IA L M IS STA TE M EN T D UE T O F R AUD T o h elp y ou d o a m ore e ff e ctiv e jo b c om bin in g id entif ie d r is ks a nd p ro vid in g th at n ecessary lin k, S AS n o. 9 9 o ff e rs th is g uid ance. R em em ber th e th re e e le m ents o f th e fr a ud tr ia ngle ; t h e r is k o f m ate ria l m is sta te m ent d ue to fr a ud g enera lly is g re ate r w hen a ll th re e a re p re sent. A s a n a udit o r, u se y our i n tu it io n, ju dgm ent a nd e xperie nce to lo ok fo r p atte rn s in t h e id entif ie d fr a ud r is ks. T he n ew s ta ndard r e m in ds y ou t h at fa ilu re to o bserv e o ne o f th e e le m ents o f th e tr ia ngle d oes n ot g uara nte e a n a bsence o f fr a ud. S ta te d a noth er w ay, i t h as b een o bserv ed th at a udit o rs h ave a te ndency to i d entif y in centiv e a nd o pportu nit y b ut m is ta kenly fa il to p urs ue th e is sue b ecause th ey h ave n ot s een a n a ttit u de/r a tio naliz atio n th at is c onduciv e to fr a ud. I t a ls o h elp s to c onsid er w heth er th e id entif ie d r is ks a re r e la te d to e it h er s pecif ic a ccounts o r tr a nsactio ns o r t o th e fin ancia l s ta te m ents a s a w hole . O nce y ou c an lin k t h e id entif ie d r is ks to a s pecif ic a ccount ( o r th e fin ancia l s ta te m ents ta ken a s a w hole ), y ou th en c an d esig n a nd p erfo rm m ore e ff e ctiv e p ro cedure s. W hen a ssessin g i n fo rm atio n a bout p ote ntia l fr a ud r is ks, c onsid er th e ty pe, s ig nif ic ance, lik elih ood a nd p erv asiv eness o f th e r is k. R EQ UIR ED R IS K A SSESSM EN TS W hen a ssessin g r is ks, th e n ew S AS h as tw o a ddit io nal r e quir e m ents . A s th e a udit o r, y ou s hould P re su m e im pro per r e ven ue r e co gnit io n is a f r a u d r is k. T he v ast m ajo rit y o f fr a udule nt fin ancia l r e portin g s chem es in volv ed im pro per r e venue r e cognit io n. S AS n o. 9 9 s ta te s th at y ou “ s hould o rd in arily ” p re sum e th ere is r is k o f m ate ria l m is sta te m ent d ue to fr a ud r e la tin g to r e venue r e cognit io n. If y ou d o n ot id entif y im pro per r e venue r e cognit io n a s a r is k o f m ate ria l m is sta te m ent d ue to fr a ud, y ou s hould d ocum ent th e r e asons s upportin g th is c onclu sio n. A lw ays id en tif y t h e r is ks o f m an ag em en t o verrid e o f c o ntr o ls a s a f r a u d r is k. T hose w ho h ave s tu die d f r a udule nt fin ancia l r e portin g h ave n ote d th at r is k o f m anagem ent o verrid e is u npre dic ta ble , a nd, th ere fo re , it is d if f ic ult fo r a udit o rs to d esig n p ro cedure s to id entif y a nd a ssess it . F or th at r e ason, m anagem ent o verrid e a lw ays s hould b e a ddre ssed in th e d esig n o f a udit p ro cedure s. C O NSID ER IN G T H E E N TIT Y ’S A NTIF R AUD P R O GRAM S A ND C O NTR O LS O nce y ou h ave i d entif ie d s pecif ic r is ks o f fr a ud, y ou s hould c onsid er th e e ntit y ’s p ro gra m s a nd c ontr o ls th at m it ig ate o r e xacerb ate y our id entif ie d r is ks o f m ate ria l m is sta te m ent d ue to f r a ud. S AS n o. 9 9 p ro vid es e xam ple s o f p ro gra m s a nd c ontr o ls in l a rg e a nd s m all b usin esses. A n ew d ocum ent, e ntit le d M anagem ent A ntif r a ud P ro gra m s a nd C ontr o ls , i s i n clu ded a s a n e xhib it to S AS n o. 9 9; it a ls o is p oste d o nlin e a t h ttp ://a ntif r a ud.a ic pa.o rg /R esourc es/A udit o rs /U nders ta ndin g+ P ro gra m s+ and+ C ontr o ls / E xhib it + to + S AS+N o.+ 99+ M anagem ent+ A ntif r a ud+ P ro gra m s+ and+ C ontr o ls .h tm ( h ttp ://a ntif r a ud.a ic pa.o rg /R esourc es/A udit o rs /U nders ta ndin g+ P ro gra m s+ and+ C ontr o ls /E xhib it + to + S AS+N o.+ 99+ M anagem ent+ A ntif r a ud+ P ro gra m s+ and+ C ontr o ls .h tm ) . T his d ocum ent, i s sued b y th e A IC PA a nd o th er o rg aniz atio ns, p ro vid es e xam ple s o f p ro gra m s a nd c ontr o ls m anagem ent c an im ple m ent to h elp d ete r, p re vent a nd d ete ct f r a ud. R ESPO NDIN G T O T H E A SSESSED R IS K S Y ou s hould a ddre ss th e r is ks o f m ate ria l m is sta te m ent d ue to fr a ud w it h a r e sponse th at H as a n o vera ll e ff e ct o n h ow th e a udit is c onducte d. Id entif ie s r is ks in volv in g th e n atu re , tim in g a nd e xte nt o f a udit p ro cedure s. A ddre sses m anagem ent o verrid e o f c ontr o ls .
J udgm ents a bout th e r is ks o f m ate ria l m is sta te m ent d ue to f r a ud h ave a n o vera ll e ff e ct o n h ow th e a udit is c onducte d i n th e fo llo w in g w ays. A ssig nm en t o f p ers o nnel a n d s u perv is io n. S AS n o. 9 9 p ro vid es r e la tiv ely s tr a ig htfo rw ard g uid ance o n th is m atte r, w hic h is e asy to u nders ta nd a nd im ple m ent. T he g uid ance s ays th e g re ate r th e r is k o f m ate ria l m is sta te m ent, t h e m ore e xperie nced p ers onnel a nd th e g re ate r a m ount o f s uperv is io n r e quir e d o n th e e ngagem ent. A cco untin g p rin cip le s. T he s ta ndard a udit r e port e xpre sses a n o pin io n a s to w heth er th e fin ancia l s ta te m ents “ p re sent fa ir ly … in a ccord ance w it h G AAP.” S om e a udit o rs a nd o th ers i n volv ed in th e fin ancia l r e portin g p ro cess h ave q uestio ned w heth er th e “ p re sent fa ir ly ” c rit e rio n h as b ecom e s ubord in ate to “ in a ccord ance w it h G AAP.” T hat is , th e is sue m ay b e w heth er s om e e ntit ie s m ake a c ase th at “ s in ce G AAP d oes n ot e xplic it ly p ro hib it a p artic ula r a ccountin g tr e atm ent, it m ust b e a ccepta ble ” w it h out c onsid erin g w heth er th e a ccountin g w ill r e sult in a “ fa ir p re senta tio n” o f th e fin ancia l p osit io n, r e sult s o f o pera tio ns a nd c ash flo w s. T hus, th e c hoic e o f a ccountin g p rin cip le s, in a ddit io n to th eir a pplic atio n, b ecom es c ru cia l fo r a udit o rs to c onsid er. S AS n o. 9 9 r e quir e s y ou to c onsid er m anagem ent’s s ele ctio n a nd a pplic atio n o f s ig nif ic ant a ccountin g p rin cip le s a s p art o f y our o vera ll r e sponse to th e r is ks o f m ate ria l m is sta te m ent. T he n ew s ta ndard fo cuses y our a tte ntio n o n a ccountin g p rin cip le s r e la te d to s ubje ctiv e m easure m ents a nd c om ple x tr a nsactio ns. In a ddit io n, g iv en th e p re sum ptio n o f r e venue r e cognit io n a s a fr a ud r is k, y ou s hould c onsid er t h e in te grit y o f th e e ntit y ’s p olic ie s o n r e venue r e cognit io n a nd w heth er th ese p olic ie s a re c onsis te nt w it h k ey r e venuere cognit io n c oncepts s uch a s t h e c om ple tio n o f t h e e arn in gs p ro cess, th e r e aliz atio n o f s ale s p ro ceeds a nd t h e d eliv ery o f th e p ro duct o r s erv ic e. P re d ic ta b ilit y o f a u dit in g p ro ced ure s. S uccessfu l p erp etr a to rs o f fr a ud a re fa m ilia r w it h t h e a udit p ro cedure s e xte rn al a udit o rs n orm ally p erfo rm . W it h th is k now le dge th ey c an c onceal t h e fr a ud in a ccounts w here a udit o rs a re le ast lik ely to lo ok. S AS n o. 9 9 r e quir e s y ou to in corp ora te a n e le m ent o f u npre dic ta bilit y in to y our p ro cedure s fr o m y ear to y ear, a nd it p ro vid es t ip s fo r i m ple m entin g th is r e quir e m ent. A DDRESS S PEC IF IC A CCO UNTS O R C LA SSES O F T R ANSA CTIO NS S AS n o. 9 9 p ro vid es g enera l g uid ance o n m odif y in g th e n atu re , tim in g a nd e xte nt o f th e a udit p ro cedure s y ou w ill p erfo rm to a ddre ss id entif ie d r is ks o f m ate ria l m is sta te m ent d ue to f r a ud. T hre e o th er a udit a re as m erit s pecia l m entio n: r e venue r e cognit io n, in vento ry q uantit ie s a nd a ccountin g e stim ate s, w hic h c an g o h and in h and w it h fr a ud a nd t h ere fo re c an b e in te rre la te d. R IS K O F M ANAG EM EN T O VER RID E O F IN TE R NAL C O NTR O L S AS n o. 9 9 r e quir e s y ou to p erfo rm c erta in ta sks to a ddre ss th e r is k o f m anagem ent o verrid e o f in te rn al c ontr o l. E xecutiv es c an p erp etr a te f in ancia l r e portin g fr a uds b y o verrid in g e sta blis hed c ontr o l p ro cedure s a nd r e cord in g u nauth oriz ed o r in appro pria te j o urn al e ntr ie s o r o th er p ostc lo sin g m odif ic atio ns ( fo r e xam ple , c onsolid atin g a dju stm ents o r r e cla ssif ic atio ns). T o a ddre ss s uch s it u atio ns, S AS n o. 9 9 r e quir e s y ou to te st th e a ppro pria te ness o f jo urn al e ntr ie s r e cord ed in th e g enera l l e dger a nd o th er a dju stm ents . U nders ta n din g t h e f in an cia l r e p ortin g p ro cess. T o e ff e ctiv ely id entif y a nd te st n onsta ndard jo urn al e ntr ie s, y ou w ill n eed to o bta in a g ood u nders ta ndin g o f th e e ntit y ’s fin ancia l r e portin g p ro cess. T his k now le dge is i m porta nt b ecause it a llo w s y ou to b e a w are o f w hat s hould h appen in a “ n orm al” s it u atio n s o y ou th en c an id entif y a nom alie s. Y ou a ls o s hould k now h ow j o urn al e ntr ie s a re r e cord ed ( fo r e xam ple , d ir e ctly o nlin e o r in b atc h m ode fr o m p hysic al d ocum ents ), b e fa m ilia r w it h th e d esig n o f a ny c ontr o ls o ver jo urn al e ntr ie s a nd o th er a dju stm ents a nd le arn w heth er th ose c ontr o ls h ave b een p la ced in o pera tio n. T his in fo rm atio n w ill h elp y ou d esig n s uit a ble te sts . T estin g jo urn al e n tr ie s a n d o th er a d ju stm en ts . Y our a ssessm ent o f th e r is k o f m ate ria l m is sta te m ent d ue to fr a ud, to geth er w it h y our e valu atio n o f th e e ff e ctiv eness o f c ontr o ls , w ill d ete rm in e th e e xte nt o f y our t e sts . S AS n o. 9 9 r e quir e s th at y ou in spect th e g enera l l e dger to id entif y jo urn al e ntr ie s to b e te ste d a nd e xam in e t h e s upport fo r th ose it e m s. T he n ew s ta ndard p ro vid es e xte nsiv e g uid ance o n w hat to c onsid er w hen s ele ctin g it e m s fo r te stin g. C om pute ra ssis te d a udit t e chniq ues m ay b e r e quir e d to id entif y e ntr ie s th at e xis t o nly e le ctr o nic ally .
R ETR O SPEC TIV E R EVIE W O F A CCO UNTIN G E STIM ATE S A ccountin g e stim ate s a re p artic ula rly v uln era ble to m anip ula tio n b ecause th ey d epend h eavily o n ju dgm ent a nd th e q ualit y o f th e u nderly in g a ssum ptio ns. S AS n o. 9 9 r e quir e s y ou to p erfo rm a r e tr o spectiv e r e vie w o f p rio ry ear a ccountin g e stim ate s fo r t h e p urp ose o f id entif y in g b ia s in m anagem ent’s a ssum ptio ns u nderly in g th e e stim ate s. T his r e vie w is n ot in te nded to c all in to q uestio n y our p ro fe ssio nal ju dgm ents m ade in p rio r y ears th at w ere b ased o n in fo rm atio n a vaila ble o nly a t th at t im e. R ath er, it s hould b e c onsid ere d w it h in th e c onte xt o f i t s i m plic atio ns fo r th e c urre nt y ear a udit a nd th e fa cts a nd c ir c um sta nces th at c urre ntly e xis t. B USIN ESS R ATIO NALE F O R S IG NIF IC ANT U NUSU AL T R ANSA CTIO NS M any fin ancia l r e portin g fr a uds h ave b een p erp etr a te d o r c onceale d b y u sin g u nusual tr a nsactio ns th at a re o uts id e th e n orm al c ours e o f b usin ess. S AS n o. 9 9 o blig ate s a udit o rs to u nders ta nd th e b usin ess r a tio nale fo r th ese ty pes o f tr a nsactio ns a nd p ro vid es a n e xcelle nt lis t o f it e m s y ou s hould c onsid er w hen a tte m ptin g to u nders ta nd th e b usin ess r a tio nale fo r u nusual t r a nsactio ns. A s a p re re quis it e fo r p erfo rm in g th is r e quir e d p ro cedure , th e e ngagem ent te am ’s u nders ta ndin g o f th e e ntit y a nd it s e nvir o nm ent m ust b e s uff ic ie nt to a llo w it to r e cogniz e a n u nusual tr a nsactio n.
E VA LU ATIN G A UDIT E VID EN CE S AS n o. 9 9 p ro vid es c om pre hensiv e e xam ple s o f c ondit io ns y ou m ay id entif y d urin g fie ld w ork th at m ig ht i n dic ate fr a ud. S AS n o. 9 9 r e m in ds a udit o rs th at a naly tic al p ro cedure s c onducte d a s s ubsta ntiv e p ro cedure s o r a s p art o f t h e o vera ll r e vie w s ta ge o f th e a udit a ls o m ay u ncover p re vio usly u nre cogniz ed r is ks o f m ate ria l m is sta te m ent d ue t o fr a ud. T he s ta ndard p ro vid es s evera l e xam ple s o f u nusual o r u nexpecte d a naly tic al r e la tio nship s th at m ay in dic ate a r is k o f m ate ria l m is sta te m ent d ue to fr a ud. M IS STA TE M EN TS T H AT M AY B E T H E R ESU LT O F F R AUD S AS n o. 9 9 d escrib es h ow y ou s hould r e spond w hen y ou d ete rm in e th at a m is sta te m ent is , o r m ay b e, th e r e sult o f fr a ud. If y ou b elie ve s uch a m is sta te m ent e xis ts , b ut it s e ff e ct is n ot m ate ria l to th e f in ancia l s ta te m ents , y ou s till a re r e quir e d to e valu ate th e i m plic atio ns o f y our b elie f, e specia lly th ose d ealin g w it h t h e o rg aniz atio nal p ers on(s ) in volv ed. F or e xam ple , if y ou d is cover th at a m em ber o f s enio r m anagem ent h as fr a udule ntly o vers ta te d h is o r h er e xpenses fo r r e im burs em ent, y ou w ill w ant to r e evalu ate th e in te grit y o f th at in div id ual a nd th e i m pact a n u ntr u stw orth y p ers on in th at p osit io n c ould h ave o n th e fin ancia l s ta te m ents a nd y our e ngagem ent. I n t h ose in sta nces w here th e m is sta te m ent is o r m ay b e th e r e sult o f fr a ud, a nd th e e ff e ct e it h er is m ate ria l o r c annot b e d ete rm in ed, y ou a re r e quir e d to ta ke th e fo llo w in g s te ps: A tte m pt to o bta in a ddit io nal e vid ence.
C onsid er th e im plic atio ns fo r o th er a spects o f t h e a udit . D is cuss th e m atte r a nd th e a ppro ach fo r fu rth er i n vestig atio n w it h a n a ppro pria te le vel o f m anagem ent th at i s a t le ast o ne le vel a bove th ose in volv ed a nd w it h s enio r m anagem ent a nd th e a udit c om mit te e.
I f a ppro pria te , s uggest th e c lie nt c onsult w it h l e gal c ounsel. S AS n o. 9 9 p ro vid es g uid ance o n th e a udit o r’s c ours e o f a ctio n w hen th e r is k o f m ate ria l m is sta te m ent d ue to fr a ud is s uch th at h e o r s he is c onsid erin g w it h dra w in g fr o m th e e ngagem ent. I t is i m possib le to d efin it iv ely d escrib e w hen w it h dra w al is a ppro pria te , b ut in a ny e vent y ou p ro bably w ill w ant to c onsult w it h y our le gal c ounsel. C O MMUNIC ATIO NS S AS n o. 9 9 s ays, “ W henever y ou h ave d ete rm in ed th at th ere is e vid ence t h at a fr a ud m ay e xis t, th at m atte r s hould b e b ro ught to th e a tte ntio n o f th e p ro per le vel o f m anagem ent. T his is a ppro pria te e ven if th e m atte r m ig ht b e c onsid ere d i n consequentia l, s uch a s a m in or d efa lc atio n b y a n e m plo yee a t a lo w le vel in th e e ntit y ’s o rg aniz atio n.” T hus, th e t h re shold fo r c om munic atio n is “ e vid ence th at a f r a ud m ay e xis t.” T he m ere p re sence o f a fr a ud r is k fa cto r o r s om e o th er c ondit io n th at h as b een o bserv ed w hen fr a ud is p re sent g enera lly d oes n ot m eet th is th re shold . D O CUM EN TA TIO N T he d ocum enta tio n r e quir e m ents o f S AS n o. 9 9 s ig nif ic antly e xte nd th ose o f th e p re vio us s ta ndard , r e quir in g d ocum enta tio n s upportin g c om plia nce w it h s ubsta ntia lly a ll t h e m ajo r r e quir e m ents o f th e s ta ndard . S AS n o. 9 9 p ro vid es a c om ple te , e asyto u nders ta nd lis t o f d ocum enta tio n r e quir e m ents . A ccord in g to th e s ta ndard , y ou a re r e quir e d to d ocum ent T he d is cussio n a m ong e ngagem ent p ers onnel in p la nnin g th e a udit r e gard in g th e s usceptib ilit y o f th e e ntit y ’s fin ancia l s ta te m ents to m ate ria l m is sta te m ent d ue t o fr a ud, in clu din g h ow a nd w hen th e d is cussio n o ccurre d, t h e a udit te am m em bers w ho p artic ip ate d a nd t h e s ubje cts d is cussed. T he p ro cedure s p erfo rm ed to o bta in in fo rm atio n n ecessary to id entif y a nd a ssess th e r is ks o f m ate ria l m is sta te m ent d ue to fr a ud. S pecif ic r is ks o f m ate ria l m is sta te m ent d ue to f r a ud th at w ere id entif ie d a nd a d escrip tio n o f th e a udit o r’s r e sponse to th ose r is ks. I f th e a udit o r h as n ot id entif ie d im pro per r e venue r e cognit io n a s a r is k o f m ate ria l m is sta te m ent d ue t o fr a ud in a p artic ula r c ir c um sta nce, th e r e asons s upportin g th at c onclu sio n. T he r e sult s o f th e p ro cedure s p erfo rm ed to f u rth er a ddre ss th e r is k o f m anagem ent o verrid e o f c ontr o ls . C ondit io ns a nd a naly tic al r e la tio nship s th at c aused th e a udit o r to b elie ve a ddit io nal a udit in g p ro cedure s o r o th er r e sponses w ere r e quir e d a nd a ny fu rth er r e sponses t h e a udit o r c onclu ded w ere a ppro pria te to a ddre ss s uch r is ks o r o th er c ondit io ns. T he n atu re o f th e c om munic atio ns a bout fr a ud m ade to m anagem ent, th e a udit c om mit te e a nd o th ers . S AS n o. 9 9 h as th e p ote ntia l to s ig nif ic antly a dvance th e p ro fe ssio n— to h elp a udit o rs d o th eir jo bs m ore e ff e ctiv ely , t o a udit s m arte r. It is a s ta ndard th at r e aches in to a ll a re as o f th e a udit p ro cess a nd it m oves a udit o rs in a d if f e re nt d ir e ctio n, a w ay fr o m th e “ c hecklis t m enta lit y ” a nd m ore in to a th in kin g p ers on’s a udit . It p uts p ro fe ssio nal s keptic is m fr o nt a nd c ente r— exactly w here it s hould b e. D ependin g o n h ow th e s ta ndard is im ple m ente d, it h as th e p ote ntia l to b e a w ate rs hed fo r h ow a udit o rs th in k a bout a nd p erfo rm a n a udit . T he n ew fr a ud s ta ndard , w hile a s ig nif ic ant s te p fo rw ard in e xpandin g th e fu nctio ns o f a n e ngagem ent te am in p la nnin g a nd p erfo rm in g a n a udit , is ju st o ne c om ponent o f th e A IC PA’s c om pre hensiv e a ntif r a ud a nd c orp ora te r e sponsib ilit y p ro gra m . O th er fr a udre la te d i n it ia tiv es fir s t w ere d escrib ed in th e S epte m ber 4 s peech A IC PA P re sid ent a nd C EO B arry C . M ela ncon d eliv ere d to th e Y ale C lu b in N ew Y ork . In th e s peech h e u nders core d th e A IC PA’s c om mit m ent to s tr e ngth en in vesto r c onfid ence b y e nhancin g th e q ualit y o f a udit s a nd r e in fo rc in g th e p ro fe ssio n’s c ore v alu es. W hen ta ken to geth er, th e i n it ia tiv es e sta blis h a c ult u re in w hic h p re ventin g a nd d ete ctin g fr a ud is e very one’s b usin ess— audit o rs , c orp ora te A m eric a a nd th e f in ancia l r e portin g c om munit y . T he p ro gra m i n clu des E sta blis hin g a n In stit u te fo r F ra ud S tu die s w it h t h e U niv ers it y o f T e xas a t A ustin a nd th e A ssocia tio n o f C ertif ie d F ra ud E xam in ers to e xplo re th e o rig in o f a nd c ir c um sta nces s urro undin g f r a ud.
L aunchin g a n A ntif r a ud a nd C orp ora te R esponsib ilit y R esourc e C ente r, to b e lo cate d o n th e A IC PA W eb s it e , fe atu rin g n ew s, to ols , in fo rm atio n a nd r e sourc es i n fr a ud p re ventio n, d ete ctio n a nd d ete rre nce.
D esig nin g a ntif r a ud c rit e ria a nd c ontr o ls fo r p ublic e ntit ie s. C allin g o n C PA s to d edic ate 1 0% o f th eir C PE c re dit s to fr a ud. S ponsorin g a fr a ud s um mit to b rin g to geth er c orp ora te le aders , th e C PA p ro fe ssio n a nd th e fin ancia l r e portin g c om munit y to id entif y n ew w ays to r e duce th e i n cid ence o f fr a ud. D evelo pin g fr e e c orp ora te g overn ance tr a in in g p ro gra m s fo cused o n th e r o le s a nd r e sponsib ilit ie s o f m anagem ent a nd c orp ora te o ff ic ia ls . W ork in g to e nsure a cadem ic in stit u tio ns a nd c olle ge te xtb ook a uth ors in corp ora te a ntif r a ud e ducatio n in t r a in in g m ate ria ls , c ours es a nd te xtb ooks. M any o f t h ese in it ia tiv es w ill b e r o lle d o ut in th e c om in g m onth s. F or m ore in fo rm atio n a bout S AS n o. 9 9, to r e ad th e a ppendix t o it e ntit le d, “ E xam ple s o f F ra ud R is k F acto rs ,” a nd to l e arn a bout th e a ntif r a ud a nd c orp ora te r e sponsib ilit y p ro gra m , v is it th e A IC PA W eb s it e a t h ttp ://a ntif r a ud.a ic pa.o rg /R esourc es/A udit o rs /Id entif y in g+ and+ A ssessin g+ V uln era bilit y + to + Fra ud/ I d entif y in g+ Fra ud+ R is k+ Facto rs /A ppendix + to + S AS+N o.+ 99+ Fra ud+ R is k+ Facto rs .h tm l ( h ttp ://a ntif r a ud.a ic pa.o rg /R esourc es/A udit o rs /Id entif y in g+ and+ A ssessin g+ V uln era bilit y + to + Fra ud/Id entif y in g+ Fra ud+ R is k+ Facto rs /A ppendix + to + S AS+N o.+ 99+ Fra ud+ R is k+ Facto rs .h tm ) . © 2 017 A sso cia tio n o f In te rn atio nal C ertifie d P ro fe ssio nal A cco unta nts . A ll r ig hts r e se rv e d.