Matakuliah : F0184/Audit atas Kecurangan
Tahun
: 2007
Audit Procedures for Fraudulent Financial
Reporting
Pertemuan XXV
Learning Outcomes
• Mahasiswa diharapkan dapat melakukan audit
kecurangan atas pelaporan keuangan
3
Bina Nusantara
Outline Materi
• Audit Procedures for:
– Inventory
– Overvalued assets
– Underreported liabilities
4
Bina Nusantara
Extended Audit Procedures
Fraudulent Financial Reporting
Inventory
Typical Fraud
1.
2.
3.
4.
Altering quantities
Faking inventory
Shifting same inventory between several different location
Altering or disguising inventory items
5
Bina Nusantara
What to Look For
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Unable to produce all inventory count tags
Lack of control on used count tags
Slow inventory turn over
Unable to produce vendor invoice purchasing supporting
purchases
Changes in gross profit percentages
Difference between inventory records and physical inventory count
Increase in inventory without purchasing
Journal entries not through purchase journal
6
Bina Nusantara
Example Audit Procedure
– Account all inventory tags during physical count
– Expand number of test count
– Examine all items counted
– Perform all inventory counts simultaneously
– Determine the quality of inventory items
– Review procedures of gross profit
– Review procedures of inventory balances and purchases
7
Bina Nusantara
Extended Audit Procedures
Fraudulent Financial Reporting
Overvalued Assets
Typical Fraud
1.
2.
3.
4.
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6.
7.
8.
Improper capitalization of cost
Failure to recognize impairment losses
Recognition of fictitious assets
Recognition of assets that does not have title to
Unusual assets valuation allowance
Unusual estimates of fair value
Improper classification of marketable securities
Manipulation of depreciation expense
8
Bina Nusantara
What to Look For
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Unusual high fixed-asset balance
Unrealistically large changes in assets balances
Unusual relationship between depreciation expense and fixed
assets balances
Condition that indicate assets may have been impaired
Missing documents related to assets transactions
Journal entries affecting the reported amount of assets
Unusual discrepancies between entity’s assets-related records and
general ledger
9
Bina Nusantara
Example Audit Procedure
– Extending the audit scope related to acquisition of fixed assets
– Physical observation of fixed assets
– Confirm terms of significant fixed asset additions
– Confirm that the entity has title to reported assets
10
Bina Nusantara
Extended Audit Procedures
Fraudulent Financial Reporting
Underreported Liabilities
Typical Fraud
1.
2.
3.
4.
5.
Understanding accounts payable
Recognizing unearned revenue as earned revenue
Failure to record all debt or liabilities
Failure to recognize contingent liabilities
Underreporting future obligations
11
Bina Nusantara
What to Look For
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Unusual trends in accounts payable balances
Evidence of contingent liabilities
Significant purchases of assets with no recorded debt
Unusual relationship between expense and recorded liabilities
Decrease in liabilities
Unusual relationship between the trend in the accrual for estimated
warranty expense and sales
Receiving reports without corresponding invoice
Amounts on vendor statements were not reported as purchase
Discrepancies in debt confirmation
Obligation not reported in the accounting records
12
Bina Nusantara
Example Audit Procedure
– Search for unrecorded debt
– Confirm the existence and terms of liabilities
– Identify the possible underreporting of liabilities
13
Bina Nusantara