Financial Statement Fraud
Prevention and Detection
2nd Edition
Published on 28. August 2009
352 pages
978-0-470-54320-7 (ISBN)
Description
Practical examples, sample reports, best practices andrecommendations to help you deter, detect, and prevent financialstatement fraud
Financial statement fraud (FSF) continues to be a majorchallenge for organizations worldwide. Financial StatementFraud: Prevention and Detection, Second Edition is a superiorreference providing you with an up-to-date understanding offinancial statement fraud, including its deterrence, prevention,and early detection.
You will find
* A clear description of roles and responsibilities of all thoseinvolved in corporate governance and the financial reportingprocess to improve the quality, reliability and transparency offinancial information.
* Sample reports, examples, and documents that promote areal-world understanding of incentives, opportunities, andrationalizations
* Emerging corporate governance reforms in the post-SOX era,including provisions of the SOX Act, global regulations and bestpractices, ethical considerations, and corporate governanceprinciples
* Practical examples and real-world "how did this happen"discussions that provide valuable insight for corporate directorsand executives, auditors, managers, supervisory personnel and otherprofessionals saddled with anti-fraud responsibilities
* Expert advice from the author of Corporate Governance andEthics and coauthor of the forthcoming Wiley textbook, WhiteCollar Crime, Fraud Examination and Financial Forensics
Financial Statement Fraud, Second Edition containsrecommendations from the SEC Advisory Committee to reduce thecomplexity of the financial reporting process and improving thequality of financial reports.
More details
Other editions
Additional editions
Book
10/2009
2nd Edition
Wiley
€70.00
Shipment within 10-20 days
Previous edition
E-Book
11/2012
Wiley
€54.99
Available for download
Persons
Zabihollah Rezaee, PhD, CPA, CFE, CIA, CGFM, CMA, is theThompson-Hill Chair of Excellence and Professor of Accountancy atthe University of Memphis and served a two-year term on theStanding Advisory Group (SAG) of the Public Company AccountingOversight Board (PCAOB). He has published over 175 articles in avariety of accounting and business journals and six books,including Corporate Governance and Ethics (Wiley).
Richard Riley, PhD, CPA, CFE, is a Louis F. TannerDistinguished Professor of Public Accounting at West VirginiaUniversity. He was recognized as the 2008 ACFE Educator of the Yearand by the American Accounting Association in 2009 for hisinnovations in accounting education. He is a forensic accountantand a Certified Fraud Examiner who has developed and implementededucational programs for the United States National Institute ofJustice and the Internal Revenue Service. In addition to hisdistinguished academic career, he was employed as a senioraccountant in the accounting firm of Deloitte & Touche.
Content
- Financial Statement Fraud : Prevention and Detection
- Contents
- Foreword
- Preface
- Acknowledgments
- Part One: Financial Reporting and Financial Statement Fraud
- 1 Financial Statement Fraud Defined
- Will History Repeat Itself?
- A Closer Look
- Definition of Financial Statement Fraud
- Nature of Financial Statement Fraud
- High-Impact Fraud Cases
- FICTITIOUS REVENUE, DOCUMENTATION FORGERY, AND THEFT OF CORPORATE ASSETS
- PERSONAL USE OF ASSETS, FALSE DOCUMENTATION, AND FINANCIAL STATEMENT FRAUD
- CAPITALIZING EXPENSES AND OTHER ISSUES
- ABUSE OF ACCOUNTING STANDARDS
- Cost of Financial Statement Fraud
- Fraud Studies and Regulatory Responses
- Antifraud Programs
- Occurrence, Prevention, and Detection
- Lessons Learned and Applications for Practice
- UNDERSTANDING THE TRANSACTION
- DOES THE ACTIVITY REQUIRE LYING?
- BASIC TENANTS OF ETHICAL DECISION MAKING
- SCARED STRAIGHT
- THE MOST IMPORTANT IMPACT?
- Notes
- 2 Financial Reporting Structure
- Introduction
- Financial Reporting System
- Importance of Financial Information
- FINANCIAL REPORTING PROCESS
- Annual Financial Reporting Requirements
- High-Quality Financial Reports
- Six-Legged Stool of the Financial Reporting Process
- Corporate Financial Reports
- Corporate Reporting Challenges
- PRESSURE TO MANAGE EARNINGS
- EXCESSIVE AND IMPROPER USE OF FINANCIAL DERIVATIVES
- Financial Restatements
- Fair Value
- Stock Options Accounting
- XBRL-Generated Financial Reports
- CONVERGENCE TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
- Antifraud Applications for Practice
- ANTIFRAUD ENVIRONMENT
- TONE AT THE TOP AND WHISTLE-BLOWER HOTLINES
- COMMUNICATE THE ORGANIZATION'S ETHICAL EXPECTATIONS
- LEAD BY EXAMPLE
- PROVIDE A SAFE MECHANISM FOR REPORTING VIOLATIONS: THE WHISTLE-BLOWER HOTLINE
- REWARD INTEGRITY
- Notes
- Part Two: Financial Statement Fraud Profile, Taxonomy, and Schemes
- 3 Cooking the Books Equals Fraud
- Introduction
- Why Does Financial Statement Fraud Occur?
- Profile of Financial Statement Fraud
- COOKS
- RECIPES
- INCENTIVES
- MONITORING
- END RESULTS
- Waste Management, Inc.: Financial Statement Fraud Analysis
- Antifraud Applications for Practice
- ORGANIZATIONAL SELF-ASSESSMENT
- UNDERSTANDING THE LAW, FRAUD EXAMINATION, AND FINANCIAL FORENSICS
- Notes
- 4 Realization, Prevention, and Detection
- Introduction
- Realization
- The 3Cs Model
- CONDITIONS
- CORPORATE CULTURE
- CHOICE
- Financial Statement Fraud Prevention
- Financial Statement Fraud Detection
- Correction Procedures
- Prevention, Detection, and Correction Strategies
- FRAUD AWARENESS EDUCATION
- Antifraud Applications for Practice
- INCENTIVES/PRESSURE
- OPPORTUNITY
- ATTITUDES OR RATIONALIZATION
- Notes
- 5 Taxonomy and Schemes
- Introduction
- Symptoms of Financial Statement Fraud
- IMPROPER REVENUE RECOGNITION
- OVERSTATEMENT OF ASSETS
- OTHER FRAUD SCHEMES
- Common Fraud Schemes
- Common Revenue Fraud Schemes
- BILL-AND-HOLD SCHEMES
- SHAM TRANSACTIONS
- IMPROPER CUTOFF OF SALES
- CONDITIONAL SALES
- Financial Statement Fraud Red Flags
- CHANNELS FOR COMMUNICATING WRONGDOING
- Whistle-blower Regulations
- Antifraud Applications for Practice
- DETECTION: RED FLAGS AND TARGETED RISK ASSESSMENT
- Notes
- Part Three: Corporate Governance and Its Role in Preventing and Detecting Financial Statement Fraud
- 6 Role of Corporate Governance
- Introduction
- Definition of Corporate Governance
- Role of Corporate Governance
- Corporate Governance Structure
- OWNERSHIP STRUCTURE
- LEGAL SYSTEM
- CAPITAL MARKETS
- Characteristics of Corporate Governance
- Corporate Governance Functions
- OVERSIGHT FUNCTION
- MANAGERIAL FUNCTION
- EXTERNAL AUDIT FUNCTION
- INTERNAL AUDIT FUNCTION
- COMPLIANCE FUNCTION
- LEGAL AND FINANCIAL ADVISORY FUNCTION
- MONITORING FUNCTION
- Global Corporate Governance
- Antifraud Applications for Practice
- Notes
- 7 Board of Directors' Oversight Responsibility
- Introduction
- Role of the Board of Directors
- Composition of the Board of Directors
- Functions of the Board of Directors
- Attributes of Boards of Directors
- STOCK OWNERSHIP
- LEADERSHIP OF THE BOARD OF DIRECTORS
- DIRECTOR ACCOUNTABILITY AND PERSONAL LIABILITY
- NOMINATION PROCESS
- VOTING SYSTEM
- DIRECTOR INDEPENDENCE
- DIRECTORS' EMERGING ISSUES
- BOARD COMMITTEES
- COMPENSATION COMMITTEE
- NOMINATING COMMITTEE
- Antifraud Applications for Practice
- Protocol: A Plan for Reaction to Allegations of Misconduct
- PROTOCOL A
- PROTOCOL B
- PROTOCOL C
- PROTOCOL D
- Notes
- 8 Audit Committees and Corporate Governance
- Introduction
- Audit Committee
- Audit Committee Attributes
- Audit Committee Roles and Responsibilities
- INTERNAL CONTROLS
- FINANCIAL REPORTING
- AUDIT ACTIVITIES
- Audit Committee Charters
- Chairperson of Audit Committees
- Audit Committee Report
- Audit Committee Roles in Preventing and Detecting Financial Statement Fraud
- Antifraud Applications for Practice
- AUDIT COMMITTEE MEETINGS
- ADDRESSING CONCERNS OF MANAGEMENT OVERRIDE AND COLLUSION
- ACTING ON ALLEGATIONS OF UNETHICAL AND FRAUDULENT CONDUCT
- Notes
- 9 Management Responsibility
- Introduction
- Management Financial Reporting Responsibilities
- MANAGEMENT RESPONSIBILITIES UNDER SECTION 302 OF SOX
- MANAGEMENT RESPONSIBILITIES FOR SECTION 404 COMPLIANCE OF SOX
- INTERNAL CONTROL EVALUATIONS
- NEW INTERNAL CONTROL REPORTS
- Management's Role in Financial Statement Fraud Prevention and Protection
- Management Motives and Incentives
- Management Override of Internal Control
- Gamesmanship
- Risk Management
- RISK MANAGEMENT PROGRAMS
- MANAGEMENT'S RESPONSIBILITY FOR INTERNAL CONTROLS
- MANAGEMENT REPORT ON INTERNAL CONTROLS
- Antifraud Applications for Practice
- TARGETED RISK ASSESSMENT IN DETAIL
- Notes
- 10 Role of the Internal Auditor
- Introduction
- Internal Auditors and Corporate Governance
- Internal Auditors' Responsibilities
- Internal Audit Fraud Standards
- Efficacy of Internal Audit in Financial Statement Fraud Prevention and Detection
- Cooperation between External and Internal Audit
- Internal Audits and the Audit Committee
- Internal Control
- COMPONENTS OF INTERNAL CONTROL
- INTERNAL AUDITOR ROLES IN ENTERPRISE RISK MANAGEMENT
- Antifraud Applications for Practice
- Notes
- 11 Role of External Auditors
- Introduction
- Independent Audit of Financial Statements
- Independent Auditor and Financial Statement Fraud
- Independent Audit and Internal Control
- Report on Internal Controls
- Fraud Detection Audit Procedures
- PROFESSIONAL SKEPTICISM
- ASSIGNMENT OF PERSONNEL
- ACCOUNTING PRINCIPLES, POLICIES, AND PRACTICES
- INTERNAL CONTROLS
- EFFECT OF FRAUD RISK FACTORS ON AUDIT PROCEDURES
- FORENSIC FIELD AUDIT
- FRAUD AUDITING
- FRAUD RISK FACTORS
- Materiality Guidance
- Risk Factors of Financial Statement Fraud
- RISK FACTORS PERTAINING TO MANAGEMENT'S CHARACTERISTICS
- RISK FACTORS RELATING TO INDUSTRY CONDITIONS
- RISK FACTORS RELATED TO OPERATING CHARACTERISTICS AND FINANCIAL STABILITY
- DOCUMENTATION OF RISK FACTORS
- Communication of Fraud
- Antifraud Applications for Practice
- Notes
- 12 Governing Bodies
- Introduction
- Role of Regulation in Corporate Governance
- Sarbanes-Oxley Act of 2002
- Securities and Exchange Commission
- SEC GOALS
- SEC's ROLE IN FINANCIAL REPORTING
- SEC's Regulation Fair Disclosure
- Financial Fraud Detection and Disclosure Act of 1992
- Private Securities Reform Act of 1995
- SEC and Financial Statement Fraud
- SEC Fraud Prevention Activities
- SEC Fraud Detection Activities
- SEC Fraud Enforcement Activities
- SUGGESTED CHANGES TO THE SEC CURRENT SYSTEM
- SEC ADVISORY COMMITTEE ON IMPROVEMENTS TO FINANCIAL REPORTING
- Role of the Financial Accounting Standards Board
- MONITORING BY INVESTORS
- RATING AGENCIES
- Antifraud Applications for Practice
- Notes
- Part Four: Digital (Computer) Approaches to Fraud and Forensic Accounting
- 13 Fraud in a Digital Environment
- Introduction
- Digital Economy
- THE INTERNET
- INFORMATION TECHNOLOGY
- Electronic Commerce
- Changes in Business Environment
- INFORMATION TECHNOLOGY
- GLOBALIZATION OF ECONOMY AND BUSINESS
- CONVERGENCE IN THE FINANCIAL AND CAPITAL MARKET
- Electronic Financial Reporting
- BENEFITS OF XBRL
- CHALLENGES OF XBRL
- FUTURE OF XBRL
- Antifraud Applications for Practice
- CYBERFORENSICS
- INFORMATION SYSTEMS GOVERNANCE AND CONTROLS
- DIGITAL EVIDENCE
- DETECTION AND INVESTIGATION
- CYBERCRIME
- Notes
- 14 Fraud Examination Practice, Education, and Research
- Introduction
- The Interrelationship: Auditing, Fraud Examination, and Forensic Accounting
- Forensic Accounting Practice
- LITIGATION SUPPORT CONSULTING
- EXPERT WITNESSING
- Fraud Examination
- CERTIFIED FRAUD EXAMINER
- Certification in Financial Forensics
- Training Competent and Ethical Fraud Examiners and Forensic Accountants
- Fraud Examination and Forensic Accounting Education
- Role of Research in a Profession
- INSTITUTE FOR FRAUD PREVENTION
- ANTIFRAUD EDUCATIONAL PROGRAMS
- Antifraud Applications for Practice
- Notes
- Appendix: Summary of Six Recent Fraud Studies
- About the Authors
- Index
- End User License Agreement
