8/6/2019 Audit Rani

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The management have responsibility to prevent the fraud. Fraud can be reduce through a

combination of prevention, deterrence and detecting measures. A good control of fraud persuade

employees to not doing fraud because manager can detect in and give punishment. The AICPE has

create a program, named management antifraud programs and controls: guidance to help prevent

deter , and detect fraud. This guidelines identified three actions:

1. Create and maintain a culture of honestly and high ethics.2. Evaluate fraud risks and implement program and controls to mitigate identified fraud risk.3. Develop an appropriate fraud oversight.

Research says that the most effective way to prevent and deter fraud is to implement programs and

controls that are based on core values embraced b the company. Creating a culture of honestly and high

ethics includes six element:

1. Setting the tone at the top managementThe manager has create a level to persuade goals and targets while at the same time requiring

honestly and ethical to reach it.

2. Creating a positive workplace environmentManagement has build a positive environmental workplace to persuade staff to reach the goal.

3. Hiring and promoting employeesA company will prevent the fraud with doing background check of all staff and doing acontrolling.

4. TrainingAll new employees should be trained about the companys expectation of employees ethnical

conduct.

5. ConformationAfter the training program, the employees has confirm their responsibility for complying with

the code of conduct.

6. DisciplineThe employees has to follow companys code of conduct.

Fraud can be easily detect if the manager know how to detect it. Actually it takes a simple step to detect

the fraud:1. Identifying and measuring

The manager has to detect the fraud that will appear from all situation.

2. Mitigating fraud riskManager had responsibilities to designing and implementing program and the control of fraud.

3. Monitoring fraud prevention programs and controlFor a high-risk areas, managers has to double the control.

When the fraud is detected, the management and obtain management had to discuss the

potential solution to solving the fraud. SAS 99 requires auditors to incorporate unpredictability in the

audit plan. Management can control exist of all fraud, because they has a unique position to prevent the

fraud. The extent of testing in effected by the effective of controls of the requires:

1. Review accounting estimates for biases2. Evaluate the business rationale for significant unusual transaction3. Fraudulent financial reporting risk of revenues.