, FOR2601 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2025 - DUE August 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
QUESTION 1
1.1 Discuss in your own words the detection techniques that can be
used by auditors to detect fraud in an organisation. (10)
Auditors use a combination of analytical, investigative, and observation
techniques to uncover fraud. Key techniques include:
1. Analytical procedures – Comparing financial data, ratios, and
trends over time to identify inconsistencies, unusual patterns, or
sudden changes that cannot be explained by normal business
activities.
2. Data mining and digital analysis – Using software tools to scan
large volumes of transactions for anomalies such as duplicate
payments, round-dollar entries, or transactions occurring at
unusual times.
3. Examination of internal controls – Evaluating the design and
effectiveness of internal controls, since weak or bypassed controls
often create opportunities for fraud.
4. Substantive testing – Checking original source documents (e.g.,
invoices, contracts, payroll records) to ensure they match
accounting entries. Discrepancies may point to falsification.
5. Observation and inquiry – Watching how processes are carried
out and asking employees questions to detect inconsistencies or
signs of concealment.
6. Surprise audits – Conducting unannounced checks, such as
inventory counts or cash reconciliations, which reduce the chance
for perpetrators to manipulate records.
Semester 2 2025 - DUE August 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
QUESTION 1
1.1 Discuss in your own words the detection techniques that can be
used by auditors to detect fraud in an organisation. (10)
Auditors use a combination of analytical, investigative, and observation
techniques to uncover fraud. Key techniques include:
1. Analytical procedures – Comparing financial data, ratios, and
trends over time to identify inconsistencies, unusual patterns, or
sudden changes that cannot be explained by normal business
activities.
2. Data mining and digital analysis – Using software tools to scan
large volumes of transactions for anomalies such as duplicate
payments, round-dollar entries, or transactions occurring at
unusual times.
3. Examination of internal controls – Evaluating the design and
effectiveness of internal controls, since weak or bypassed controls
often create opportunities for fraud.
4. Substantive testing – Checking original source documents (e.g.,
invoices, contracts, payroll records) to ensure they match
accounting entries. Discrepancies may point to falsification.
5. Observation and inquiry – Watching how processes are carried
out and asking employees questions to detect inconsistencies or
signs of concealment.
6. Surprise audits – Conducting unannounced checks, such as
inventory counts or cash reconciliations, which reduce the chance
for perpetrators to manipulate records.
