Reference no: EM132824996

The primary purpose of the fraud brainstorming session is to assess the risk of material misstatement due to fraud which is very different from making general audit objectives or creating analytical procedures or assessing audit risk and materiality. When fraud investigations gets to the level of it already occurring and fraud brainstorming sessions are in the works it is done to discuss any misstatements and misconceptions so that the issue can be deterred and corrected. The loss as happened so the decision makers are in damage control mode. The auditor is responsible for detecting the errors that led to fraud and that comes from assessment the financial statements for material misstatements and design the audit to provide reasonable assurance of deterring material errors and irregularities. a sign of management overdid is spending in excess of approved limits. A manager's authorization should be required to process such exceptions. Managers cannot have the ability to override their own authorization,

• Fraud prevention is now at the top of the auditor's list and the goal is to create an environment that will enable fraud to be prevented. Training the people to hire low risk managers in all areas such as IT, HR and Accounting. Create a positive work environment. Put in place internal controls and adhere to the policy. Conduct proactive fraud prevention pre audits. Create and enforce punishments for non-compliance. Set this tone from the top.

Problem 1: Describe a checks an balance scenario that allows for whistleblowing and prevents retaliation to the informant?