,FOR2601 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
FOR2601 – ASSIGNMENT 1 (SEMESTER 2, 2025)
QUESTION 1 (20 marks)
1.1 Detection techniques used by auditors to detect fraud in
an organisation (10)
Auditors apply several fraud detection techniques to identify
irregularities. These include:
1. Analytical procedures – Comparing current financial data
with prior periods, budgets, or industry averages to
identify unusual variances that may indicate fraud.
2. Ratio analysis – Using financial ratios (e.g., debt-to-equity,
gross profit margin) to detect inconsistencies that could
signal misstatements.
3. Substantive testing – Testing transactions and account
balances to confirm validity and completeness of financial
information.
4. Surprise audits and spot checks – Conducting
unannounced inspections to reduce opportunities for
fraud and reveal hidden manipulation.
, 5. Internal control evaluation – Assessing the effectiveness of
segregation of duties, authorisation procedures, and
record-keeping systems. Weak controls often point to
fraud opportunities.
6. Data mining and digital forensics – Using software tools to
detect anomalies such as duplicate payments, round-
number transactions, or unusual journal entries.
7. Interviews and inquiries – Questioning staff and
management to identify inconsistencies in explanations.
8. Observation – Monitoring operations directly to detect
irregular practices.
9. External confirmations – Verifying balances with third
parties (e.g., banks, suppliers) to confirm accuracy of
reported figures.
10. Trend analysis – Studying long-term patterns to
detect sudden, unexplained changes.
These techniques together increase the likelihood of uncovering
fraudulent activities.
1.2 Basic considerations/tactical steps when starting a new
investigation (10)
When beginning a new investigation, the following tactical steps
must be considered:
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
FOR2601 – ASSIGNMENT 1 (SEMESTER 2, 2025)
QUESTION 1 (20 marks)
1.1 Detection techniques used by auditors to detect fraud in
an organisation (10)
Auditors apply several fraud detection techniques to identify
irregularities. These include:
1. Analytical procedures – Comparing current financial data
with prior periods, budgets, or industry averages to
identify unusual variances that may indicate fraud.
2. Ratio analysis – Using financial ratios (e.g., debt-to-equity,
gross profit margin) to detect inconsistencies that could
signal misstatements.
3. Substantive testing – Testing transactions and account
balances to confirm validity and completeness of financial
information.
4. Surprise audits and spot checks – Conducting
unannounced inspections to reduce opportunities for
fraud and reveal hidden manipulation.
, 5. Internal control evaluation – Assessing the effectiveness of
segregation of duties, authorisation procedures, and
record-keeping systems. Weak controls often point to
fraud opportunities.
6. Data mining and digital forensics – Using software tools to
detect anomalies such as duplicate payments, round-
number transactions, or unusual journal entries.
7. Interviews and inquiries – Questioning staff and
management to identify inconsistencies in explanations.
8. Observation – Monitoring operations directly to detect
irregular practices.
9. External confirmations – Verifying balances with third
parties (e.g., banks, suppliers) to confirm accuracy of
reported figures.
10. Trend analysis – Studying long-term patterns to
detect sudden, unexplained changes.
These techniques together increase the likelihood of uncovering
fraudulent activities.
1.2 Basic considerations/tactical steps when starting a new
investigation (10)
When beginning a new investigation, the following tactical steps
must be considered:
