www.incorp.

asia

FORENSIC ACCOUNTING VS
INVESTIGATIVE AUDITING
1 June 2023

WORKING PARTNER OF OFFICIAL CORPORATE SERVICES PARTNER OF

PRESENTER’S CV

Vidvant Brahmantyo
GRC Specialist
More than 17 (seventeen) years of experience in GRC

CEO at In.Corp Indonesia

https://incorp.co.id/

https://www.linkedin.com/in/vbrahmantyo/

Education & Professional Certifications:

• Bachelor of Economy, Majoring in Accounting
• Chartered Accountant (CA) Indonesia No.11.D42202
• Certified Internal Auditor (CIA) No.172916
• Certified Fraud Examiner (CFE)
AGENDA
09.00 – 09.10 Opening

09.10 – 09.40 Introduction to Fraud

09.40 – 10.10 Forensic Accounting vs Investigative Auditing

10.10 – 10.40 Fraud Risk Management & Three Lines Model

10.40 – 11.10 The Future of Forensic Accounting

11.10 – 11.30 Key Takeaways

11.30 – 12.00 Q&A?

Introduction to Fraud

4
Fraud Defined
Fraud Act (2006)

• "Fraud by false representation" is defined as a case where a person makes "any representation
as to fact or law ... express or implied" which they know to be untrue or misleading.
• "Fraud by failing to disclose information" is defined as a case where a person fails to disclose
any information to a third party when they are under a legal duty to disclose such information.
• "Fraud by abuse of position" is defined as a case where a person occupies a position where
they are expected to safeguard the financial interests of another person, and abuses that
position; this includes cases where the abuse consisted of an omission rather than an overt
act.

In all three classes of fraud, it requires that for an offence to have occurred, the person must have
acted dishonestly, and that they had to have acted with the intent of making a gain for
themselves or anyone else, or inflicting a loss (or a risk of loss) on another.

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Fraud As Defined By Otoritas Jasa Keuangan (OJK)

POJK No. 39/POJK.03/2019 tentang Penerapan Strategi Anti Fraud bagi Bank
Umum

Fraud adalah tindakan penyimpangan atau pembiaran yang sengaja dilakukan

untuk mengelabui, menipu, atau memanipulasi Bank, nasabah, atau pihak lain,
yang terjadi di lingkungan Bank dan/atau menggunakan sarana Bank sehingga
mengakibatkan Bank, nasabah, atau pihak lain menderita kerugian dan/atau
pelaku Fraud memperoleh keuntungan keuangan baik secara langsung maupun
tidak langsung.

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Error vs Fraud

▪ Error are unintentional misstatements or omission in financial statements

▪ Fraud, in contrast, arises from deceitful financial reporting and from

misappropriation of assets

▪ Intent is the primary difference between an error and fraud

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The Fraud Tree / Classification System

Sumber: 2022 Association of Certified Fraud Examiners (ACFE) Report to the Nation on Occupational Fraud & Abuse.
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The Fraud Triangle
• Greed
• Higher stature
• Personal debt, financial losses
• Personal problems
• Market expectation
• Compulsive habits: gambling, drugs,
alcohol, cars, shopping, affairs…etc
• Family/peer/other pressure

• Lack of controls (preventive and

detective)
• Poor compliance with controls
• Revenge
• Lack of monitoring and oversight
• I deserve more
• Absence of visible disciplinary policies
• Wealth will gain me recognition
• Failure to investigate allegations of fraud
• Rules are for others and misconduct
• Everyone does it • Failure to discipline perpetrators
• No one will get hurt • Failure to recruit collateral staff for their
observation of subtle behavior
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Fraud in Asia–Pacific
• The median loss for the 198 Asia–Pacific cases was
US$121,000.
• Corruption schemes were more than twice as common as
any other scheme type, followed by the misappropriation
of expense reimbursement (billing) and misappropriation
of noncash assets.

Sumber: 2022 Association of Certified Fraud Examiners (ACFE) Report to the Nation
on Occupational Fraud & Abuse.
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Corruption Perception Index 2022
Turun 4 poin dibandingkan tahun sebelumnya, Indonesia saat ini masih berada di bawah nilai rata-rata region Asia Pacific
(45/100).

Year Score
2012 32
2013 32
2014 34
2015 36
2016 37
2017 37
2018 38
2019 40
2020 37
Sumber: https://www.transparency.org/cpi2022 2021 38
The Corruption Perceptions Index ranks 180 countries and territories by their perceived levels of public 2022 34
sector corruption, according to experts and business people.

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 Fraud Detection in Asia–Pacific

• The distribution of detection methods was

very similar to that observed overall.
• The top three mechanisms, Tip
(Whistleblowing System-WBS), Internal
Audit, and Management Review,
accounted for more than 75% of frauds
detected in Asia–Pacific.

Sumber: 2022 Association of Certified Fraud Examiners (ACFE) Report to the Nation
on Occupational Fraud & Abuse.

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Classifying Red Flag Behaviors

Fraudsters living beyond their means has been the most common red flag in every study since 2008.

Sumber: 2022 Association of Certified Fraud Examiners (ACFE) Report to the Nation on Occupational Fraud & Abuse.
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Most Notorious Case – Enron (2001)
• In April 2001, Fortune Magazine listed ENRON as the 7th largest
company in the USA and most Innovative Company.
• Six months later, ENRON filed for bankruptcy.
• Greatest accounting fraud of 20th century.
• 12,000 people directly lost their jobs, retirement benefits and entire
life savings.
• Pensioners who bought stocks of Enron lost US$70 billion when
price of stock collapsed to ZERO.
• Caused by “Lax Auditing” by Arthur Andersen accounting firm , one
of the “Big 5” (85,000 people and over US$9billion annual
revenues) collapsed.
• Others to blame: CFO Andrew Fastow (6 years prison sentence),
CEO Jeff Skilling (24 years prison sentence), stock analysts who keep
pushing Enron stock, senior management for hiding losses in
dubious off-balance-sheet partnerships, media exaggeration and
frenzy.

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Reminder: Financial Fraud Fears

https://youtu.be/VCcC-mY0eM8
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Forensic Accounting vs Investigative
Auditing

16
Definition of Forensic Accounting vs Investigative Auditing

Forensic Accounting is the action of identifying, recording, settling, extracting,

sorting, reporting, and verifying past financial data or other accounting activities
for settling current or prospective legal disputes or using such past financial data
for projecting future financial data to settle legal disputes.

VS
Investigative Auditing is detailed scrutiny of selected activities which will help
client understand the process in a better and comprehensive way. An
Investigative Auditing is the complete enquiry of specific accounts or records of a
business and generally used to prove a particular fact.

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Role of Forensic Accountant vs Investigative Auditor

A Forensic Accountant may take on fraud auditing engagements and may be a

investigative auditor, but he or she will also use other accounting, consulting,
and legal skills in broader engagements. In addition to accounting skills, he or she
will need a working knowledge of the legal system and excellent communication
skills to carry out expert testimony in the courtroom and to aid in other litigation
support engagements.

VS
Investigative Auditor is a fraud examiner (could be an accountant), especially
skilled in auditing, who is generally engaged in auditing with a view toward fraud
discovery, documentation, and prevention.

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Contrasting Audit, Fraud Examination, and Forensic Accounting
Characteristic Audit Fraud Examination Forensic Accounting

Time perspective: Historical Historical Future and historical

Primary focus: Periodic Reactive Proactive and ongoing

Investigation scope: Narrow Narrow Broad ranging

Main work product is: Audit opinion Fraud case report Forensic audit report

Main responsibility to: Company and Defrauded party Concerned principal or third
public party
Guidelines are: Rules-based Principles-based; under audit Principles-based
rules, it is rule-based
Purpose of report: Ensure GAAP is Identify perpetrator of fraud Fraud risk assessment and
followed strategic services

Professional stance: Non-adversarial Adversarial Adversarial and non-

adversarial

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Forensic Accountant Detailed Roles and Responsibilities

Use sophisticated computer program

Performs investigative accounting as well as litigation support

Use both accounting and investigating skills to interpret financial evidence

Expert Witnesses

Calculate economic damage

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Accountant’s Role in Fraud Detection

• In the early 1980s, companies began to use computers to perform their record
keeping.

• Intense competition caused auditing fees to fall as much as 50% from the mid-
1980s to the mid-1990s.

• Auditors cut costs by reducing the process of reviewing hundreds of corporate

accounts. They grew more reliant on internal controls.

• Top executives were able to circumvent internal controls and manipulate the
records.

• This lead to situations such as Enron, WorldCom, Xerox, Adelphia

Communication, and the fall of Arthur Andersen in the early 2000s.

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Accountant’s Role in Fraud Detection (Cont’d)
• Due to the financial disaster of companies such as Enron and WorldCom, there
has been an increased use of forensic techniques in audits and an increase in
fees.

• Some accounting experts believe that every audit engagement should include
much more scepticism and detailed review of transactions.

• Other accounting experts suggest that only special engagements specifically

targeting fraud can adequately and effectively root out the problem.

• The Big Four and the next two accounting firms believe that every public
corporation should have a forensic audit every three years

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What is the Impact?

Auditor need to added several additional procedures that may be used to cover
a potential financial statement fraud:
Extensive use of interviews and leveraging techniques designed to elicit
sufficient information to prove or disprove a hypothesis.

Document inspection that may extend to authentication procedures and

handwriting analysis.

Significant public records search to uncover, for example, unexpected title or

ownership, other known addresses, and prior records of individuals.

Legal knowledge regarding rules of evidence including chain of custody and

preservation of evidence integrity.

Sumber: Annett Stalker and M.G. Ueltzen, “An Audit Versus A Fraud Examination,” CPA Expert, Winter 2009, p. 4.
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Forensic Accountant Expected Skill Set

Investigative
Auditing
Forensic
Accountant

Law Accounting

Criminology

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Related Professional Certifications

Forensic Accountant Investigative Audit

Issued by Institute of Certified Forensic Accountant Issued by Association of Certified Fraud Examiner

Audit

Issued by Ikatan Akuntan Publik Indonesia (IAPI)

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Forensic Accountant Characteristics

Detail oriented

Persistent

Ambitious

Highly organized

A great deal of creativity

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Similarity Between Auditor, Investigator & Forensic Accountant

Beberapa kesamaan yang dimiliki antara Auditor, Investigator dan Forensic Accountant, diantaranya
adalah:
➢ Praktisi di setiap area harus memiliki pemahaman yang luas tentang tren bisnis dan industri;
➢ Pemahaman menyeluruh tentang masalah, waktu, dan proses audit;
➢ Pemahaman tentang jenis catatan dan dokumen keuangan yang harus ada untuk mendukung
jumlah yang dicatat; dan
➢ Kepedulian tentang dampak fraud terhadap operasi perusahaan.

Auditor, Investigator dan Forensic Accountant memiliki tujuan yang sama, yaitu:
Pelaporan keuangan perusahaan yang sepenuhnya sesuai dengan prinsip akuntansi yang berlaku umum.

Auditor Laporan Keuangan harus terus mengembangkan teknik baru untuk mengungkap
lebih banyak indikasi fraud.

Ketika indikasi fraud muncul, Auditor Laporan Keuangan dapat mempertimbangkan untuk
melibatkan Forensic Accountant terlatih dan berpengalaman untuk membantu dalam
mengembangkan dan menerapkan prosedur investigasi yang akan membantu menyelesaikan
masalah atau tuduhan atas fraud tersebut.
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Forensic Accountant’s Skill (1)

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Forensic Accountant’s Skill (2)

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Fraud Risk Management & Three Lines
Model

30
A COSO - Consistent Approach for Fraud Risk Management
•Tone at the top
•Code of Conduct/Ethics • Identify fraud risk
•Whistleblower Hotline factors, fraud risks
Creating and fraud schemes
a Control
Environment

Performing
Monitoring Fraud Risk
Activities Assessments
AFPC
• Monitoring
effectiveness of
antifraud programs Sharing Designing and
and controls Information and Implementing
Communication Antifraud
Control
Activities
• Link or map
• Effective communication
identified fraud
of antifraud programs
AFPC: Anti Fraud Programs & risks to control
and controls throughout
Controls activities
the Organization
Source: Committee of Sponsoring Organizations of the Treadway Commission, Anti Fraud Program & Controls (AFPC)

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Integrating Fraud Risk Management & ERM

Board of Directors Fraud Risk Governance

Risk Governance

Executive Management
Risk Infrastructure & Fraud Strategy & Policy
Oversight

Fraud
Business Units Prevention,
Risk Ownership Detection &
Investigation

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Fraud Risk Assessment

Elements of the fraud risk assessment on which management may

focus its AFPC efforts include:

• Identify Fraud Risk Factors Creating a

Control
Environment
• Identify Fraud Risks Performing
Monitoring Fraud Risk
Assessments
• Consider Potential Fraud Schemes Activities

• Map Specific Identified Risks Sharing Designing and

Information and Implementing
Communication Antifraud
• Mitigating Control Activities Control
Activities

• Risk Treatment

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Management’s Fraud Risk Assessment Overview
Step
Identify & Evaluate
1 ▪ Identify fraud risk factors
Fraud Risk Factors
Identify Possible Fraud
2
Schemes & Scenarios
Analyze Fraud Risks &
3 Evaluate Control Design
& Implementation
Evaluate Fraud Risk
4
Assessment Results &
Prioritize Residual
Fraud Risks
5 Risk Treatment
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Approach
▪ Identify fraud risks
▪ Identify specific fraud schemes
▪ Identify account balances and potential
errors related to each fraud risk
▪ Analyze the likelihood and significance of
possible fraud schemes
▪ Link fraud schemes to mitigating controls &
evaluate control design and implementation
▪ Evaluate the results of fraud risk analysis
against established criteria and prioritize
risks for treatment
▪ Prepare Fraud Risk Action Plan
▪ Implement Plan
Output
▪ Schedule of fraud risk factors
▪ Sound knowledge of fraud risk
environment
▪ Pervasive & specific fraud risks
▪ Catalog of fraud schemes
▪ Inherent Risk Rating (IRR) of entity
▪ Catalog of existing controls
▪ Fraud Control Risk Rating
▪ Fraud Risk Related Control Gap Analysis
▪ Residual Risk Rating (RRR)
▪ Identification of fraud risks requiring
further treatment
▪ Fraud risks prioritized
▪ Fraud Risk Action Plan
▪ Fraud Risks Treated
34
Management’s Fraud Risk Assessment Sample Documentation

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Fraud Deterrence Cycle

Budaya yang ditetapkan dan Investigasi atas dugaan fraud serta

ekspektasi perilaku dengan tujuan proses perbaikan ke depan yang
untuk mencegah pelaku fraud menjawab root cause dari fraud
tersebut

Kontrol yang dirancang untuk

membantu memastikan bahwa
Dirancang untuk membantu
yang terjadi hanya transaksi yang
mendeteksi fraud sebelum hal
valid, terotorisasi, dan sah serta
tersebut menjadi besar
untuk melindungi aset perusahaan
dari kerugian akibat fraud

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Three Lines Model in Fraud Deterrence

Setiap lini memiiki tugas Untuk memastikan keefektifan implementasi Tata Kelola Perusahaan yang baik, organisasi perlu
dan peran berbeda – beda meningkatkan peran dari masing – masing lini pertahanan secara memadai. The Institute of Internal Auditors
terkait pencegahan fraud (IIA) memperbarui Three Lines Model sebagai cara untuk menjelaskan hubungan serta peran antara lini dan
tanggung jawab setiap lini pertahanan di perusahaan.

Accountability,
reporting

Delegation,
direction,
resources,
oversight

Allignment
communication
, coordination,
collaboration

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Governing Body in Fraud Deterrence

Governing Body (Dewan Komisaris dan Direksi)

memiliki tanggung jawab yang sama dalam beberapa
aspek dalam pencegahan fraud, diantaranya:

• Menetapkan “tone at the top" yang mengkomunikasikan laporan keuangan yang transparan dan akuntabel
• Menanggapi dengan cepat, adil, dan proporsional terhadap pelanggaran (fraud) yang terjadi
• Mempertahankan proses audit internal dan eksternal yang independen
• Memastikan aliran informasi penting yang tepat ke baik secara internal maupun ke pihak eksternal
• Menetapkan sistem pengendalian internal yang memadai
• Melakukan penyelidikan serta melakukan remediasi masalah fraud yang muncul

Unlock Forensic Accounting vs Investigative Auditing 38

First Line in Fraud Deterrence

First Line merupakan garda terdepan dalam sistem tata kelola perusahaan,
manajemen risiko, dan pengendalian internal dalam mendeteksi fraud.

Tanggung jawab First Line dalam aspek pencegahan fraud, diantaranya:

• Memahami bisnis, prosedur pengendalian internal yang berlaku, proses
penganggaran, kebijakan akuntansi, industri, dan iklim ekonomi umum
yang mempengaruhi Perusahaan
• Pemahaman yang memadai tentang bisnis perusahaan serta
hubungannya dengan mitra bisnis, vendor, dan pelanggan sangat penting
untuk evaluasi yang tepat atas faktor risiko fraud
• Melakukan deteksi dengan menggunakan prosedur analisis
• Melakukan deteksi terhadap perubahan-perubahan yang tidak sesuai dengan prosedur yang berlaku
• Penggunaan sistem informasi dan teknologi secara efektif

Unlock Forensic Accounting vs Investigative Auditing 39

First Line’s Fraud Alarm
• Perbedaan dalam catatan akuntansi
✓ Transaksi yang tidak dicatat secara lengkap atau
tepat waktu atau tidak dicatat dengan benar dalam
jumlah, periode akuntansi, klasifikasi, atau
kebijakan perusahaan
✓ Saldo atau transaksi yang tidak didukung dokumen
pendukung yang sah
✓ Adjustment yang signifikan di menit-menit terakhir
✓ Akses karyawan ke sistem serta catatan
pembukuan yang tidak sesuai dengan
wewenangnya
✓ Perbedaan signifikan yang tidak direkonsiliasi, tidak
diselidiki, dan dikoreksi secara tepat waktu
✓ Laporan tentang dugaan fraud
• Dokumen palsu atau yang diubah
✓ Tipe dan ukuran font tidak konsisten
✓ Tidak tertulis alamat yang jelas
Unlock Forensic Accounting vs Investigative Auditing
• Bukti yang hilang maupun yang bertentangan
✓ Dokumen hilang
✓ Tidak tersedianya dokumen asli, hanya dokumen
fotokopi ataupun elektronik
✓ Item penting yang tidak dapat dijelaskan dalam
proses rekonsiliasi
✓ Bukti dokumen yang tidak biasa, seperti perubahan
tulisan tangan pada dokumen yang biasanya dicetak
secara elektronik
✓ Tanggapan yang tidak konsisten, tidak jelas, atau
tidak masuk akal dari pihak terkait
✓ Anomali antara catatan pembukuan perusahaan dan
balasan konfirmasi dari pihak ketiga
✓ Hilangnya uang kas, persediaan atau aset fisik
lainnya secara signifikan
✓ Bukti elektronik yang hilang atau tidak tersedia,
dimana hal ini tidak sesuai dengan kebijakan
penyimpanan dokumen perusahaan
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External Assurance Providers in Fraud Deterrence

Financial Auditor merespon risiko fraud pada laporan keuangan, sedangkan

Forensic Accountant merespon pada kecurigaan, tuduhan, atau bukti fraud.

Financial Auditor Forensic Accountant

Objektif Membentuk opini atas laporan keuangan
Tujuan Semua pemangku kepentingan perusahaan
sebagai pengguna laporan keuangan
Nilai Menambahkan kredibilitas laporan keuangan
perusahaan
Sumber bukti Inquiry, observasi, pemeriksaan, dan
reperformance transaksi akuntansi untuk
mendukung asersi laporan keuangan
Kecukupan bukti Reasonable assurance untuk akun-akun yang
material baik secara kuantitatif maupun
kualitatif
Mencari pembuktian terhadap kemungkinan
dan/atau besarnya fraud yang terjadi
Pihak internal perusahaan; aparat penegak
hukum
Membuktikan kecurigaan dan/atau tuduhan;
menemukan fakta
Peninjauan data keuangan dan non-keuangan
terperinci, catatan publik, pencarian fakta serta
wawancara, termasuk wawancara pihak ketiga
Mencari fakta untuk mendukung atau
menyangkal kecurigaan atau tuduhan atas fraud

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The Future of Forensic Accounting

42
Where do We Go from Here?

5 (lima) hal yang menentukan masa depan Forensic Accounting:

1. Evolusi disiplin ilmu itu sendiri, termasuk batasan antara audit

laporan keuangan dan Forensic Accounting
2. Pendidikan dan pelatihan untuk Forensic Accountant
3. Perubahan peraturan hukum yang ada
4. Perubahan lingkungan perusahaan, di mana keputusan untuk
menyelidiki serta memproses hasil penyelidikan selalu dibandingkan
dengan cost & benefit analysis
5. Perubahan dalam proses pelaporan di perusahaan, terutama yang
berkaitan dengan data operasi non-keuangan yang dapat
dimanipulasi

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What to Prepare?

➢ Technology
Dengan semakin berkembangnya teknologi dan modus fraud yang terjadi, maka adaptasi
Forensic Accountant terhadap teknologi baru menjadi kunci kesuksesan profesi ini. Teknologi
baru akan menambah keterampilan yang diperlukan seperti critical analysis hingga
pengetahuan teknis seperti manajemen data, teknik normalisasi dan visualisasi.

➢ Interpersonal Skill
Kemampuan untuk benar – benar mendengarkan, melakukan analisis berdasarkan data dan
fakta, menafsirkan isyarat non-verbal serta memahami berbagai latar belakang budaya.

➢ Professional Scepticism
Dengan professional scepticism yang baik, Forensic Accounting Investigator selalu melakukan
verifikasi secara prudent terkait informasi yang didapat untuk mengungkap fakta di lapangan.
Mengembangkan sikap professional scepticism merupakan upaya yang harus dilakukan secara
berkesinambungan dan keterampilan ini perlu untuk terus diterapkan serta diarahkan dengan
pelatihan yang memadai.

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What to Prepare? (continued)

➢ International impact
Keterampilan pemberantasan dan pencegahan korupsi akan menjadi ujian bagi negara – negara
berkembang untuk dinyatakan sebagai "berhasil atau gagal". Pemimpin negara yang memiliki
determinasi kuat untuk melakukan pencegahan fraud dan tindak pidana korupsi akan dibantu
oleh mitra Forensic Accountant yang memiliki kemampuan terbaik. Dengan adanya Kerjasama
yang baik tersebut, maka akan membuka keran investasi, baik lokal maupun internasional.

➢ Tekanan pada layanan penilaian

Pemodelan keuangan sering kali mengacu pada "penilaian" perusahaan, terutama perusahaan
baru, dan standar penilaian saat ini mengeluarkan pengecualian untuk layanan penilaian yang
diberikan sehubungan dengan litigasi. Profesi mungkin melihat perubahan dalam terminologi,
misalnya, “certified valuation," untuk membedakannya dari penggunaan pasar keuangan sehari
– hari. Selain itu, diperlukan standar berbasis litigasi untuk memungkinkan kesetaraan antara
profesional yang mematuhi standar dan bagi mereka yang memberikan layanan penilaian saat
ini.

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Future of Forensic Accounting

Berdasarkan artikel “Forensic Auditing: Three Trends To Watch” oleh Forbes pada Juli 2018. Terdapat 3 (tiga) tren yang
patut menjadi perhatian, yaitu:
1. Artificial Intelligence (AI) akan segera hadir
Dengan kecerdasan buatan, Forensic Accountant dapat meminta komputer untuk membuka email serta dokumen di
mana terdapat kata atau pola tertentu yang muncul untuk membantu mengarahkan ke pemeriksaan yang lebih detil.
Dengan demikian, tidak hanya meningkatkan efisiensi dengan mengurangi waktu investigasi, tetapi juga
meningkatkan efektivitas kualitas hasil audit yang lebih baik.

2. Permintaan klien untuk teknologi digital akan semakin besar

Satu dari empat eksekutif yang disurvei (27%) mencantumkan “informasi real-time terkait risiko signifikan dan
pengendalian internal" sebagai salah satu manfaat terpenting dari perkembangan teknologi terkait dengan
pelaporan keuangan. Dengan kemajuan teknologi yang semakin baik memungkinkan analisis data dilakukan untuk
100% populasi.

3. Persiapan menghadapi kasus fraud memainkan peranan yang sangat krusial

Penting bagi organisasi dalam menghadapi tantangan dengan hati – hati dan disiplin serta menerapkan solusi yang
tepat. Hal utama yang harus dipastikan adalah Forensic Accountant dan Pengacara tidak memiliki benturan
kepentingan (conflict of interest), sehingga dapat melaksanakan tugasnya dengan baik.
Unlock Forensic Accounting vs Investigative Auditing 46
Technology in Forensic Accounting (1)

Optical Character Recognition (OCR)

OCR is the use of technology to distinguish printed or

handwritten text characters inside digital images of physical
documents, such as a scanned paper document.
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Technology in Forensic Accounting (2)

ACL Desktop Tableau

Qlik View/Qlik Sense

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 Technology in Forensic Accounting (3)
UltraBlock Forensic
Passware Kit Forensic Card Reader
The Forensic Card Reader can be used
Passware Kit Forensic is the complete to read (and optionally write) to the
encrypted electronic evidence following multimedia card formats:
discovery solution that reports and Compact Flash Card (CFC), MicroDrive
decrypts all password-protected items (MD), Memory Stick Card (MSC),
on a computer. The software Memory Stick Pro (MSP), Memory Stick
recognizes 280+ file types and works Pro Duo (MSPD), Smart Media
in batch mode recovering passwords. xD Media, Secure Digital Card (SDC,
SDHC and SDXC), MicroSD, MultiMedia
Card (MMC)
Unlock Forensic Accounting vs Investigative Auditing
EnCase Forensic
The Gold Standard in Forensic
Investigations – including
Mobile Acquisition. EnCase™
eDiscovery litigation support
software enables eDiscovery
data collection from diverse
sources including endpoints for
litigation and investigations.
49
Key Points in Gathering Digital Evidence
Before Forensic Accounting examines any system, Forensic Accounting need to make sure that Forensic
Accounting has permission to examine that system. Forensic Accounting needs to know the legal aspects
of collection, documentation, and preservation of digital evidence.

Below were eight considerations for gathering digital evidence:

❑ The computer is not a substitute for forensic accounting judgement and experience. It cannot replace
document reviews, interviews and follow up steps.
❑ If possible, data should be gathered at the outset of engagement and prior to the initial field visit.
❑ Data obtained should be checked for accuracy and completeness, because incorrect and incompleteness
data set may cause to premature and incorrect conclusions.
❑ The complexity of the tools used should be commensurate with the size and complexity of engagement.
❑ Some forensic accounting investigators may place too much reliance on the tool itself.
❑ Ensure that planned procedures are allowed from a legal perspective and that any evidence gathered
may be used for legal purposes if required.
❑ Data collection across national boundaries must be done with proper legal advice about the export data
or about the type of data being collected.
❑ Proper computer forensic techniques must be used to avoid inadvertently altering evidence.

Unlock Forensic Accounting vs Investigative Auditing 50

Key Takeaways

51
A COSO - Consistent Approach for Fraud Risk Management
•Tone at the top
•Code of Conduct/Ethics • Identify fraud risk
•Whistleblower Hotline factors, fraud risks
Creating and fraud schemes
a Control
Environment

Performing
Monitoring Fraud Risk
Activities Assessments
AFPC
• Monitoring
effectiveness of
antifraud programs Sharing Designing and
and controls Information and Implementing
Communication Antifraud
Control
Activities
• Link or map
• Effective communication
identified fraud
of antifraud programs
AFPC: Anti Fraud Programs & risks to control
and controls throughout
Controls activities
the Organization
Source: Committee of Sponsoring Organizations of the Treadway Commission, Anti Fraud Program & Controls (AFPC)

Unlock Forensic Accounting vs Investigative Auditing 52

How to Mitigate Fraud with Fraud Risk Management

• Fraud risk can never be eliminated entirely; more effective

organizations employ a risk-based approach to mitigating fraud
risk.
• Fraud risk management is an ongoing and evolutionary process
that changes as the organization and the environment change.
• Regular fraud risk management process evaluation and
measurement assists continuous improvement.
• Fraud risk management is a collaborative effort that involves
everyone within an organization.

Unlock Forensic Accounting vs Investigative Auditing 53

Audit Procedures to Detect Financial Statement Fraud in General

◼ Fraud Brainstorming Session

◼ Journal Entry Testing & Vouching

◼ Accounting Estimates

◼ Significant Unusual Transactions

Unlock Forensic Accounting vs Investigative Auditing 54

Q&A?

55
QUESTION & ANSWER

56
HINTS…

“Risk comes from not knowing what you're doing.”

– Warren Buffett (Enterpreneur) –

57
THANK YOU

Connect with
Vidvant Brahmantyo
Chief Executive Officer (CEO)
vidvant@incorp.co.id

Group HQ’s website

www.incorp.asia

www.incorp.asia
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