Updated: Jan 2
In the last few years, a new type of internal control has emerged, sometimes called anti-fraud controls.
Since the vast majority of sizable frauds tend to involve senior management, establishing strong anti-fraud programs and controls is considered a healthy part of the control environment in larger entities.
Anti-fraud controls can be likened to speed bumps designed to slow down traffic but not stop it altogether.
Anti-fraud controls are designed to deter bad behaviour before it happens, but they can never stop it entirely.
Anti-fraud controls are particularly relevant for larger entities but can also be designed to discourage fraud in smaller entities.
They may not prevent fraud from occurring, but they do provide a powerful disincentive; they cause the perpetrators to think carefully about the repercussions of their actions.
Anti-fraud controls can be designed to address all five internal control components.
However, in relation to risks of material misstatement in the financial statements, special emphasis is placed on the tone set at the top of the entity.
This addresses the attitudes and actions of management toward control and is part of the control environment that influences all personnel's control consciousness.
A good “tone at the top” is considered the most effective anti-fraud control.
Two examples of anti-fraud controls applicable to smaller entities include:
Managers have often used non-routine journal entries to commit fraud.
A policy that non-routine journal entries (over a specified amount) must be supported by an explanation and a manager’s signature (indicating approval) is a simple anti-fraud control that can be implemented in any size entity.
Such a policy empowers the entity’s accountant to always ask the manager (requesting an entry) for an explanation and approval.
This will not necessarily stop a senior manager from demanding an inappropriate entry be made. Still, the thought of having to document the approval and provide an explanation physically may be enough to deter the request from ever being made in the first place.
If it does not deter the request, the auditor may notice that the entry was not approved and ask why. This could then lead to further investigation.
Segregation of duties
In smaller entities, the accountant or bookkeeper is often in a trusted position, with minimal supervision and ample opportunity to commit fraud.
One possible (but somewhat costly) anti-fraud control would be to hire a part-time bookkeeper to take over that person’s job for at least one or more weeks per year, such as when the accountant is on holiday or performing other tasks.
The policy of employing a replacement could deter the bookkeeper from committing fraud at all. If fraud is already occurring, the replacement policy might provide an opportunity to detect it.
一个好的 "高层基调 "被认为是最有效的反舞弊控制。
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