ACCT 220- WEEK8- Professional Resources Report

Overview

Why audit? We will either be the auditor or be audited. We must understand internal control and the management of risk. The management of risk is everyone’s responsibility.

Report Requirements

Report Content 

1. This report fulfills the request of your supervisor who is completing a project on these key issues, including certifications and the roles fraud detection and deterrence, as well as internal control serve, to meet the goals of the organization.
2. Following your review of course materials in Week 8, use the websites below to create a report of at least one page for each of the three topics: fraud detection and deterrence, internal control, and certifications.
3. Relate these topics to our course material for Principles of Accounting I.
4. The goal is to research, consider, and report what you know about these topics.
5. Consider the question and decide: what would you want to know? 

Report Topics

• Fraud Detection and Deterrence
• Internal Control: COSO
• Certifications: CFE, CIA, and CISA

Report Layout

1. Always include your name and a descriptive title in the file name.
2. Create, save, and submit a Microsoft Word document that covers the topics listed below and consists of one page (one page usually has at least 300 words) for each topic. 
3. Your report should be adequate. Fewer than three pages is not long enough; seven pages is too long. Ideally, you will end up with a three-page (three pages usually have at least 900 words) report not including the title or reference page. 
4. Report is expected to have at least three-pages not including the title or reference page. Fewer than three pages is not long enough; seven pages is too long.
5. Include your name and a descriptive title in the file name.
6. Your report should be single-spaced, with double spacing between paragraphs.
7. Use headers within the document. 

Report Structure

1. You are writing a business report, not double-spaced academic papers.
2. This is not a business proposal, and it is not a casual reflective report. 
3. Tell a story. 
4. Explain the concepts.
5. You are building your vocabulary.
6. Spell check. Write, read, and edit. Take care with word selection and sentence structure.
7. Use APA style for citations and create a works cited list. Include website references.
8. You can use the above concepts, particularly the paragraph on “Why audit?” without reference. A good item for your works cited list: UMUC ACCT 220 Course Materials.
9. Similar to all submissions for this class, use your own words. 
10. Show what you know!

WEEK8- Professional Resources Report

Fraud Detection and Deterrence

Almost every organization faces the issue of fraud some in some form. Fraud is a knowing misrepresentation of the truth. It is an intentional act on another’s property or money by unfair means. It is generally conducted by internal members that can be managers, employees, or officers. To detect and prevent these types of fraud different certified professionals work with the internal control department. Fraud can be different types like internal fraud, external fraud, or fraud against an individual. The fraud triangle is an accepted model that explains why people involve in fraudulent activities.

Fraud Detection:

An increase in regular fraud can cause a huge loss to the organization. To prevent the organization from these fraudulent activities first thing the management has to do is detect the fraud. The very common way to detect fraud is “Fraud risk Assessment” (Ai et al. 2022, P.13).

Fraud risk Assessment helps in reviewing the internal controls, policies, and procedures to identify the area that is used for fraud by the members of the organization. Assessment makes sure that all the procedures and policies are being used efficiently by the employees and management too. The fraud risk assessment team checks the necessary documents and suggests remediation.

Fraud Deterrence:

After detecting the fraud the next step is to take preventive measures to stop the fraudulent activities. The first step to loss prevention is identifying the risk. Fraud loss is as similar as any other corporate loss. Adequate policies and procedures are needed to prevent the organization from fraud. Effective internal control also plays a vital role in Fraud deterrence. An organization should focus on its operations instead of involving in these fraudulent activities.

Internal Control: COSO

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is an organization that is funded and sponsored by five major professional associations headquartered in the United States the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI)​, The Institute of Internal Auditors (IIA), and the Institute of Management Accountants (IMA). In 1992 COSO first time published a report that the techniques useful for organizations About how to design, and implement effective and efficient internal control. This report became very popular and accepted by the organizations as well as the Internal Control Committee. No doubt the guidance that is described in the report was effective but due to some changes in the organization and operational activities, COSO updated its framework (Srirejeki, Faturahman & Supeno, 2019,p.45).

Framework:

The framework of COSO helps the management to implement effective internal control in an organization. It is designed to give an overview of the whole internal control system and makes it transparent for the management and owners of the company. Internal control is required to focus on financial and operational management. Effective Internal control makes sure as low as the risk can be. It also helps in dealing with changes that happen in the organization due to economic or environmental factors. Management needs to set the objective to determine what type of control measures should be taken in an organization (Chan, Chen, & Liu,2021,p.338).

Process:

Internal control is a process as it acts as a part of management activities. Sometimes human procedures get failure and management faces override that makes the management imperfect in this case internal control provides a kind of assurance to the management. 

Adaptability:

Not all organizations or businesses are the same. Some are different products based some are service providers, some companies are situated in foreign countries, and some hire and train their internal human resources. In all these different situations internal control can be implemented effectively in all sectors.

Certifications: CFE, CIA and CISA 

Introduction:

When it’s about career-shaping, certifications are the first point that comes to mind. There are some accounting certifications that accountants or accounting aspirants take to enhance their skills and grow their careers.

Certified Fraud Examiner (CFE):

Certified Fraud Examiners determine and prevent activities that associate with fraud. CFE provides expertise in fraud detection and its prevention. ACFE is the most popular education or training center that provides Certified Fraud Examiner (CFE) certification. One needs to be ethical and careful attention to detail. This certification is helpful in various career opportunities. This certification also helps accounting professionals to get promotions and get a high salary (Triansyah & Putra, 2019, p.16).

The minimum criteria for the CFE applicant must be a degree holder and at least two years of working experience in fraud control. Candidates without experience can also apply if they qualify for 40 eligible points.

Certified Internal Auditor (CIA):

CIA is a certification for the professionals who carry out audit work. The Institute of Internal Auditors (IIA) conducts the examination and issues CIA certification. A certified internal auditor verifies the financial report and helps to detect any inefficiency in the organization’s internal control. The criteria to apply for this certification is, the candidate must have an educational degree and a relevant experience in the same field (not less than 2 years) (Ariyanto, 2019, p.46).

The Certified Information Systems Auditor (CISA):

The CISA certification is for those professionals who work in Information systems. ISACA (Information Systems Audit and Control Association) is an organization that conducts the certified information system auditor certification exam and approves the certificate to qualify candidates. This certification is for those professionals who work in Information systems. CISA candidates must have 5 years of experience in the same field. CISA control and monitor the organization’s information technology and system.

Reference List:

Ai, J., Russomanno, J., Guigou, S., & Allan, R. (2022). A Systematic Review and Qualitative Assessment of Fraud Detection Methodologies in Health Care. North American Actuarial Journal, 26(1), 1-26.

Ariyanto, R. (2019). ANALISIS KOMPARATIF SERTIFIKASI AUDITOR: CERTIFIED FRAUD EXAMINER (CFE) DAN CERTIFIED FORENSIC AUDITOR (CFrA) (Doctoral dissertation, Universitas Gadjah Mada).

Chan, K. C., Chen, Y., & Liu, B. (2021). The linear and non-linear effects of internal control and its five components on corporate innovation: Evidence from Chinese firms using the COSO framework. European Accounting Review, 30(4), 733-765.

Srirejeki, K., Faturahman, A., & Supeno, S. (2019). Accounting Certifications.

Triansyah, M. A., & Putra, Y. H. (2019, November). Effect Of Profile on Auditor Certification Try Out Using A Computer Based Test. In IOP Conference Series: Materials Science and Engineering (Vol. 662, No. 2, p. 022069). IOP Publishing.