Weekly Blog 5 - Expert report formatting

In society there are a set of rules that govern how people go certain things, to determine what is right and wrong, this is important in order to create a civilised environment. Forensic accounts have establish a set of guidelines that follow the fundamental responsibilities in order to be a professional line of work.

The guidelines set out in Australia's Practice Note CM7 help reinforce the fundamental ideas forensic accounting, which can be found in APES 215, the foundation forensic accounting is built on; public interest, independence, competence and due care and confidentiality. CM7 paragraph 2.1 (c) requires the expert to show his/her area of expertise, which tie in with APES 215 paragraph 3.14 competence and due care, where a member shall only take an assignment in their area of expertise. Having a clear set of guidelines also creates uniformity to follow court rules and comparability in each expert report.

My experience with guidelines usually do with following a manual. Take for example building a furniture from IKEA, some people just throw away the manual and do it blind, however, it is recommended to follow the book. I would of course follow the manual because one mistake could ruin the whole thing, this also applies to CM7 and APES 215, not following the rules set in place have consequences I would rather not deal with.

Relevant links

Practice Note CM7
http://www.fedcourt.gov.au/law-and-practice/practice-documents/practice-notes/cm7

APES 215
http://www.apesb.org.au/~apesborg/development/APESBCMS/ver1.3/uploads/standards/apesb_standards/13092014103232p2.pdf

Weekly Blog 4 - Know your enemy

Fraud will always be a threat an organisation faces, whether it be internally or externally. It is imperative measures are put in place to mitigate the risk of fraud and one method of detection is to have an understanding of what pressures a fraudster in committing a crime.

Identifying the drivers of fraud; opportunity, motivation and rationale, explains why a person commits fraud and in return helps come up with measures design to minimise fraud (KPMG, 2013). With the ever changing environment of technology, opportunities for fraud are steadily increase, prominent type of fraud now a days is cybercrime, ranging from malicious software, ransomware and stealing/tampering data. As a result, organisations are quick to adapt by understanding how it occurs and responding quickly through the policies and procedures of an IT governance framework.

There are hackers all over the internet and after researching about what they can do, it made me realised that my computer and even my mobile phone is not properly protected. Now I have anti virus and malware protection software, monthly back ups, weekly scans and cleanups, to some people this might be overkill but I would rather not have my various accounts hacked like my banking details, gmail etc.

References

KPMG (2013). Global profiles of the fraudster. Retrieved 9 April, 2015 from
http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Documents/fraudster-global-profiles.pdf

Weekly Blog 3 - Regulatory Environment

Adapting and keeping up to date with technology has always been an important factor in business, this applies no less in the field of law. The revised edition of APES 215 brought in changes to strengthen the role of the forensic accountant in both quality and ethical standards.

Forensic accounting is still a growing occupation and with that the laws and standards that govern it are always changing. The most recent development of the regulatory environment was designed to be in the best interest of the profession, society and a court of law. With stricter rules in place this makes sure that the expert report is of high standard for it to be court ready. The revised edition of APES 215 provides clarity over the original 2008 edition in order to push towards Independence and Objectivity to avoid the risk of partisan or other concerning issues.

First entering into university, many of me assignments I had to do was research and apply different accounting standards to a case. At first I was overwhelmed by the numerous standards a business has to comply with; APES, ASIC, AASB, Corporations Act, Taxation law etc. Blame partly due to my inexperience, I think that when I enter into the work force I would need to get acquainted with the latest standards in order to conduct myself professionally.

Weekly Blog 2 - Fraud risk assessment

The growth of technology has allowed organisations to conduct business in more proficient ways. As a result, the complex system of electronic; data, assets and information are becoming an increasingly important resource to protect. COBIT 5, a framework for IT management and governance guides an organisation in developing policies and procedures enterprise wide to minimise IT fraud.

Assessing fraud and other IT threats should be done in conjunction with an end to end view in mind. A holistic approach reassures that the different components in an organisations system are taken into account in developing a unified governance and compliance framework for the identification, assessment and mitigation of risks (Bureau Van Dijk, 2013). Even if the crucial parts of a system are protected, if a smaller component ends up failing, it could up end causing the entire system to crash.

An article I read where a small business was hit by ransomware, not having the right training and protection put in place, an employee roaming the internet infected one system of the business and spread to the accounting software. This makes me wonder if my personal computer has been hit with malware from looking on the internet and whether my firewall and security system are adequate in detecting and protection against cybercrime.

I recommend that organisations should adopt these measures to minimise fraud risk.

1) Training and awareness - for employees to know the basic forms of cybercrime

2) Security systems put in place to prevent and protect confidential business electronic data and information

3) Backup data - In case of an attack

4) Personal background checks - to prevent internal fraud from happening

5) Developing a holistic principles, policies and framework - attitude of tone from the top is very strict against this type of behaviour

Relevant Links

http://www.pcworld.com/article/2901672/how-to-prevent-ransomware-what-one-company-learned-the-hard-way.html

References

Bureau Van Dijk (2013). Key steps to a holistic risk management strategy identified. Retrieved 6,  April 2015 from
http://www.bvdinfo.com/industrynews/procurement-and-risk-management/key-steps-to-a-holistic-risk-management-strategy-identified/801626578 

Weekly Blog 1 - Tone from the top

As new technology is introduced, an organisation's information system are becoming more complex, to minimise potential loses senior management are pressured into implementing an IT governance that suits the organisation's culture.

Poor attitude from senior management has a negative rippling effect down to lower levels of the organisation, otherwise known as, tone from the top. A governing body producing ineffective internal controls are one of the primary contributors to fraud according to a KPGN survey(Accountingweb, 2007). As a result, creates a culture throughout the organisation whereby opportunities for fraud are more prevalent.

After being introduced to the tone from the top concept, it reminded me of an example a lecturer gave from another subject. An employee embezzled thousands of dollars all because her firm had minimal IT governance, they had all access to computers and could print fake checks. What baffles me is that after a complaint was made, none of the higher staff took action, especially her boss 'trusted' this employee all because they had worked there for a long time.

I recommend that organisations should provide proper training and whistleblower policies to minimise the chances of fraud.

References

Accountingweb (2007). Executives say poor internal controls contribute most to fraud. Retrieved 18 March, 2015 from http://www.accountingweb.com/topic/executives-say-poor-internal-controls-contribute-most-fraud