,FOR2601 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
FOR2601 – Assignment 1 (Complete Answers)
Semester 2 – 2025
QUESTION 1
1.1 Detection techniques that can be used by auditors to
detect fraud in an organisation (10)
Fraud detection is a key responsibility of auditors. Different
techniques can be applied to identify unusual or suspicious
activities:
1. Data analytics and computer-assisted audit techniques
(CAATs): Auditors use specialised software to analyse
large volumes of transactions and identify irregular
patterns, such as duplicate payments, round amounts, or
unusual timing.
2. Reconciliation procedures: Regular comparison of
financial records, such as bank statements and ledgers,
helps uncover missing funds, altered balances, or hidden
liabilities.
, 3. Trend and ratio analysis: By comparing financial ratios
and trends over time, auditors can detect inconsistencies
that may suggest manipulation, for example sudden
changes in gross profit margins.
4. Document examination: Scrutinising invoices, contracts,
or vouchers for alterations, missing signatures, or unusual
authorisations can highlight fraud.
5. Confirmation techniques: Verifying balances and
transactions directly with third parties (e.g., customers,
suppliers, or banks) assists in identifying fictitious
transactions.
6. Observation and physical inspection: Auditors may
physically inspect assets such as stock or equipment to
ensure they exist and match recorded figures.
7. Interviews and inquiries: Speaking with employees may
reveal inconsistencies in explanations or suspicious
behaviour.
8. Whistleblowing channels review: Examining reports from
anonymous tip-offs or ethics hotlines can guide auditors
towards fraudulent activity.
9. Forensic accounting techniques: In-depth tracing of
money flows, related-party transactions, or hidden
accounts can reveal fraud schemes.
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
FOR2601 – Assignment 1 (Complete Answers)
Semester 2 – 2025
QUESTION 1
1.1 Detection techniques that can be used by auditors to
detect fraud in an organisation (10)
Fraud detection is a key responsibility of auditors. Different
techniques can be applied to identify unusual or suspicious
activities:
1. Data analytics and computer-assisted audit techniques
(CAATs): Auditors use specialised software to analyse
large volumes of transactions and identify irregular
patterns, such as duplicate payments, round amounts, or
unusual timing.
2. Reconciliation procedures: Regular comparison of
financial records, such as bank statements and ledgers,
helps uncover missing funds, altered balances, or hidden
liabilities.
, 3. Trend and ratio analysis: By comparing financial ratios
and trends over time, auditors can detect inconsistencies
that may suggest manipulation, for example sudden
changes in gross profit margins.
4. Document examination: Scrutinising invoices, contracts,
or vouchers for alterations, missing signatures, or unusual
authorisations can highlight fraud.
5. Confirmation techniques: Verifying balances and
transactions directly with third parties (e.g., customers,
suppliers, or banks) assists in identifying fictitious
transactions.
6. Observation and physical inspection: Auditors may
physically inspect assets such as stock or equipment to
ensure they exist and match recorded figures.
7. Interviews and inquiries: Speaking with employees may
reveal inconsistencies in explanations or suspicious
behaviour.
8. Whistleblowing channels review: Examining reports from
anonymous tip-offs or ethics hotlines can guide auditors
towards fraudulent activity.
9. Forensic accounting techniques: In-depth tracing of
money flows, related-party transactions, or hidden
accounts can reveal fraud schemes.
