Posted: March 7th, 2016

Explain in terms of the fraud triangle why the fraudulent behavior that you have described is of a specific type, explain why the type of behavior seems common in your industry, and is so costly.

1. In an industry in which you have worked, have direct knowledge of, and/or have conducted research in, describe an example of fraud that you feel was particularly costly to the industry. Explain in terms of the fraud triangle why the fraudulent behavior that you have described is of a specific type, explain why the type of behavior seems common in your industry, and is so costly. Then describe how the industry dealt with the example of fraud you described. Does the industry generally deal well with the type of fraud under examination? What improvements would you recommend to help the industry prevent and detect the type of fraud?

2. “The aim of risk assessment in auditing standards is to improve the quantity and effectiveness of audits by substantially changing the audit practice” (Ramos, 2009). Statements on auditing standards nos. 104-111 provide increased rigor to the audit process in a number of key areas, including the assessments of inherent and control risks and the linking of these risk assessments to further audit procedures. After reading Ramos, M. (2009) and Lamoreaux, M.G. (2011) and watching the videos for Module 2, discuss the importance of inherent and control risk assessment prior to an audit.

Readings:
Lamoreaux, M. G. (2011, June). Beef up internal audit. Journal of Accountancy, 211(6), 20.
Ramos, M. (2009) Risk-based audit best practices. Journal of Accountancy, 208(6), 32-37.

Videos:
https://www.youtube.com/watch?feature=player_detailpage&v=ncYYY5xU3Oo
https://www.youtube.com/watch?feature=player_detailpage&v=kMKZfSbi82I
https://www.youtube.com/watch?feature=player_detailpage&v=lgA6UY88qUU
https://www.youtube.com/watch?feature=player_detailpage&v=YqEbQc0tDas
https://www.youtube.com/watch?feature=player_detailpage&v=Om4kebs_muA
https://www.youtube.com/watch?v=fyf2xjx4mzU