Template Information
This checklist is laser-focused on evaluating factors that may put the business into a high risk of fraud. it was divided into 2 parts: (1) assessment of risks from misstatements arising from fraudulent financial reporting and (2) misappropriation of assets. the first part tackles threats to financial stability or profitability by economic, industry, or entity operating conditions, and excessive pressure from management to meet the requirements of third parties. the second part highlights the assessment of any adverse relationships between the entity and employees with access to cash or other assets susceptible to theft that may motivate those employees to misappropriate those assets.
Category: general
Template Questions
- Is financial stability or profitability threatened by economic, industry, or entity operating conditi
- INCENTIVES AND PRESSURES
- Does excessive pressure exist for management to meet the requirements or expectations of third partie
- Does available information indicate that the personal financial situation of management or those char
- Does the nature of the industry or the entity’s operations provides opportunities to engage in fraudu
- Is the monitoring of management not effective as a result of the following:
- Is the organizational structure complex or unstable, as evidenced by the following:
- Are the internal control components deficient as a result of the following:
- ATTITUDES AND RATIONALIZATIONS
- A strained relationship between management and the current or predecessor auditor, as exhibited by th
- Adverse relationships between the entity and employees with access to cash or other assets susceptibl
- Certain characteristics or circumstances may increase the susceptibility of assets to misappropriatio
- OPPORTUNITIES
- Inadequate internal control over assets may increase the susceptibility of misappropriation of t hose
- Recommendations
- Full Name and Signature of Inspector