Question Tag: Evidence Gathering

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 15 Marks

AAA – May 2023 – L3 – Q7 – Forensic Auditing

Discuss ethical principles for fraud investigation, advise on evidence gathering procedures, and recommend laws and agencies for legal action.

At the annual general meeting of Aggressive Bank Limited for the year 2020, shareholders raised concerns over increasing cases of customer complaints about fraud. Shareholders emphasized that drastic actions were required to avoid brand damage and reputational issues.

In performing their oversight functions, the audit committee commissioned the internal audit unit to investigate fraud issues and likely causes. The internal audit report highlighted the following issues:

  1. Hacking of Accounts: Unauthorized transfers due to poor information security systems.
  2. Forgery: Forged cheques, signatures, and withdrawal slips used in collusion with bank staff.
  3. Fictitious Accounts: Opening and operating fake accounts to facilitate illegal transfers due to incomplete KYC.
  4. Loans to Fictitious Borrowers: Fictitious loans issued via fake accounts.
  5. False Overtime Claims: Junior staff claiming overtime for hours not worked.
  6. Suppression of Cash/Cheques: Diversion of customer deposits and loan repayments into fictitious accounts.
  7. Alteration of Programs: Unauthorized access to systems to manipulate account balances.

Likely Causes:

  • Weak internal controls and supervision.
  • Non-compliance with KYC rules.
  • Poor IT and database management.
  • Negligence, inadequate training, and poor working conditions.
  • Fear of reporting fraud to regulators due to reputational concerns.

The audit committee mandated management to engage a forensic expert to investigate and report on the matter within four weeks. Your firm has been appointed for this engagement.

Required:

(a) Discuss the ethical principles applicable to this situation. (5 Marks)

(b) Advise on the procedures to gather evidence for an acceptable report to management. (5 Marks)

(c) Recommend the agencies and relevant laws management should use to tackle these problems, where legal actions might be required. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – May 2023 – L3 – Q7 – Forensic Auditing"

  • 5 Marks

AA – Nov 2021 – L2 – Q2a – Audit and Assurance Risk Environment

Explains audit risks auditors should consider when gathering evidence in the healthcare sector.

Hamosa Manu Hospital (HMH) is one of the government hospitals in Ghana where healthcare is free due to the National Health Insurance Scheme, as taxpayers fund healthcare by contributing an indirect tax of 2.5% on consumption.

All purchase requisition forms for medical supplies are forwarded to a centralized procurement department. Upon receipt, the procurement team will research the lowest price from suppliers and raise a purchase order. This is then passed to the Procurement Manager, who authorizes all orders. The small procurement team receives in excess of 300 forms a day.

Due to the government’s announcement of free Covid-19 testing in public hospitals, the hospital has invested heavily in new equipment, which, although very expensive, has meant that more testing could be performed and patient recovery rates would be faster. Currently, there is a shortage of appropriately trained medical staff. As a result, a capital expenditure committee has been established, made up of senior managers, and they plan and authorize any significant capital expenditure items.

Required:
Explain audit risks that auditors of HMH should consider during evidence gathering.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AA – Nov 2021 – L2 – Q2a – Audit and Assurance Risk Environment"

  • 15 Marks

AAA – May 2023 – L3 – Q7 – Forensic Auditing

Discuss ethical principles for fraud investigation, advise on evidence gathering procedures, and recommend laws and agencies for legal action.

At the annual general meeting of Aggressive Bank Limited for the year 2020, shareholders raised concerns over increasing cases of customer complaints about fraud. Shareholders emphasized that drastic actions were required to avoid brand damage and reputational issues.

In performing their oversight functions, the audit committee commissioned the internal audit unit to investigate fraud issues and likely causes. The internal audit report highlighted the following issues:

  1. Hacking of Accounts: Unauthorized transfers due to poor information security systems.
  2. Forgery: Forged cheques, signatures, and withdrawal slips used in collusion with bank staff.
  3. Fictitious Accounts: Opening and operating fake accounts to facilitate illegal transfers due to incomplete KYC.
  4. Loans to Fictitious Borrowers: Fictitious loans issued via fake accounts.
  5. False Overtime Claims: Junior staff claiming overtime for hours not worked.
  6. Suppression of Cash/Cheques: Diversion of customer deposits and loan repayments into fictitious accounts.
  7. Alteration of Programs: Unauthorized access to systems to manipulate account balances.

Likely Causes:

  • Weak internal controls and supervision.
  • Non-compliance with KYC rules.
  • Poor IT and database management.
  • Negligence, inadequate training, and poor working conditions.
  • Fear of reporting fraud to regulators due to reputational concerns.

The audit committee mandated management to engage a forensic expert to investigate and report on the matter within four weeks. Your firm has been appointed for this engagement.

Required:

(a) Discuss the ethical principles applicable to this situation. (5 Marks)

(b) Advise on the procedures to gather evidence for an acceptable report to management. (5 Marks)

(c) Recommend the agencies and relevant laws management should use to tackle these problems, where legal actions might be required. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – May 2023 – L3 – Q7 – Forensic Auditing"

  • 5 Marks

AA – Nov 2021 – L2 – Q2a – Audit and Assurance Risk Environment

Explains audit risks auditors should consider when gathering evidence in the healthcare sector.

Hamosa Manu Hospital (HMH) is one of the government hospitals in Ghana where healthcare is free due to the National Health Insurance Scheme, as taxpayers fund healthcare by contributing an indirect tax of 2.5% on consumption.

All purchase requisition forms for medical supplies are forwarded to a centralized procurement department. Upon receipt, the procurement team will research the lowest price from suppliers and raise a purchase order. This is then passed to the Procurement Manager, who authorizes all orders. The small procurement team receives in excess of 300 forms a day.

Due to the government’s announcement of free Covid-19 testing in public hospitals, the hospital has invested heavily in new equipment, which, although very expensive, has meant that more testing could be performed and patient recovery rates would be faster. Currently, there is a shortage of appropriately trained medical staff. As a result, a capital expenditure committee has been established, made up of senior managers, and they plan and authorize any significant capital expenditure items.

Required:
Explain audit risks that auditors of HMH should consider during evidence gathering.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AA – Nov 2021 – L2 – Q2a – Audit and Assurance Risk Environment"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@nbcinstitute.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
error: Content is protected !!
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan