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Forensic Accounting, Forensic Techniques, and Fraud Detection Copyrighted 2001 D. Larry Crumbley, ... - page 225 / 352

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© D.L. Crumbley

Interviewing Executives

One way to detect fraud is to interview company personnel. The AICPA Fraud Task Force provides an interviewing template of 13 questions for CEOs, CFOs, and Controllers.

1.

Explain the purpose of interview- need to assess risk and comply with audit responsibilities

2.

Inquire whether they are aware of any instances of fraud within their organization- Do they have reason to believe that fraud may have occurred or is occurring?

3.

Has the CEO or CFO ever approved an accounting treatment for transactions that were not appropriate?

4.

Have there been any instances where someone has attempted to inflate assets or revenue or deliberately understate liabilities and expenses?

5.

Is there any member of management that has a direct interest or indirect interest in any customer, vendor, competitor, supplier or lender?

6.

Is any member of management related to any other member of management?

7.

Does anyone in the company have any personal, financial or other problems that might affect their job performance?

8.

If there was an area within the company that might be vulnerable to fraud, what would that be?

9.

Has anyone within the accounting department been let go or resigned within the past year?

10.

Is there anyone in management that appears to be living a lifestyle beyond their means? – expensive cars, trips, jewelry, vices

11.

Has anyone been involved in civil or criminal proceedings or filed bankruptcy

12.

Does the company have a strong ethics policy?

13.

Has anyone ever been fired for committing fraud against the company?

Source: Ronald L. Durkin et. al, “Incorporating Forensic Procedures in an Audit Environment,” Litigation and Dispute Resolution Services Subcommittee, New York: AICPA, 2003.

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