<AP.

03 Audit Roles and Responsibilities Schedule>

Fraud Risk Management Inquiries

Binof (Private) Limited

Date: July 16, 2022
Year Ended: June 30, 2022
Venue: Binof Office

Attendees: Client Representatives:

Mr. Sheraz (Chief Financial Officer)

ARSH Chartered Accountants Representative:

Junaid Mehmood (Team Senior)

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 Inquiries
a) Questions to understand historical
frauds perpetrated and the
management's commitment
regarding fraud prevention,
deterrence, and detection.
 Do you have any knowledge of any
fraud perpetrated or alleged or
suspected that could result in a material
misstatement of the entity's financial
statements?
 Do you have any knowledge of any
other fraud, regardless of materiality,
perpetrated, or any alleged or suspected
fraud?
 Have you received any letters or
communications from employees,
former employees, analysts, short-
sellers, or others concerning allegations
of fraud?
 In the past, what kinds of frauds have
been committed against the entity by
employees or executives, including
defalcations and employee thefts? (For
a new client)
 What incentives and pressures do you
perceive to be on management and how
are the related fraud risks managed?
 Where fraud or potential fraud is
identified, how is the matter
investigated and remediated?
Response
 We do not know about any fraud perpetrated or
alleged or suspected that could result in a material
misstatement of the entity's financial statements.
 We do not know about any other fraud, regardless
of materiality, perpetrated, or any alleged or
suspected fraud.
 We have not received any letters or
communications from employees, former
employees, analysts, short-sellers, or others
concerning allegations of fraud.
 Not applicable, as no frauds have been committed
in the past.
 There is no such pressure on the management to
increase profit as the company is in the trading
business which requires the satisfaction of
customers to whom sales are made as per
respective demand. However after recovery from
Covid last year, Management had a goal to try and
increase profitability which might proved to be a
perceived incentive to commit fraud.
 Not applicable, as no fraud has yet been identified.
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 Inquiries Response
b) Questions to gain an understanding of
management’s fraud risk assessment
and related controls.
• What is your understanding about the
risks of fraud in the entity, including • There have been no instances of fraud in the
any specific fraud risks the entity has past although there is a risk of fraud in revenue
identified or any account balances or recognition for which substantive audit procedures
classes of transactions for which a risk
shall be performed at a later stage.
of fraud may be more likely to exist,
and why?

• What programs and controls have

management established to mitigate
specific fraud risks that have been
identified, or that otherwise help to
prevent, deter and detect fraud?
• Controls such as validation and preparations of
bank reconciliation statements etc. are in place for
cash and bank. A monthly profit statement is prepared
which matches the cost to the revenue of each specific
project.

• How does management monitor those

programs or controls?
• Has anyone asked you or others within
the entity to withhold information from
us, alter documents, or make fictitious
entries in the books?
• Processes relating to cash and revenue are
checked and updated on a timely basis by management
to ensure that any risk of fraud is accounted for.
• No one has asked us or others within the entity
to withhold information from you, alter documents, or
make fictitious entries in the books.

• Are you aware of any inappropriate or • We are not aware of any inappropriate or
unusual activity relating to the unusual activity relating to the processing of journal
processing of journal entries and other entries and other adjustments
adjustments?

c) Questions to gain an understanding of

how management communicates its
commitment regarding the
prevention, deterrence, and detection
of fraud.

• How does management communicate its

views on business practices and ethical • Policies for ethical behavior and/or misconduct
behavior? are in place.

• Have you reported to the Audit

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Prepared by: Junaid Mehmood
Reviewed by:

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