NCJ Number
160759
Date Published
1995
Length
3 pages
Annotation
This chapter describes some steps that can improve the effectiveness of an audit in detecting and preventing economic crime.
Abstract
The first step is to begin at the top by ensuring that the main reporting lines for auditors stem from an audit committee that includes non-executive directors. Then encourage the identification and prioritization of critical business and financial risk. Also, prioritize and plan the areas to be covered by the audit and focus on the high-risk areas. Further, consider the organization's control objectives and the underlying considerations, taking account of relevant benchmarks. Focus on staff who display wealth, have been rapidly promoted above their abilities, positions where there is a history of fraud, and positions in which staff have access to large sums of money but are paid little. Also concentrate on transactions with related parties or which involve payments to or from havens of secrecy. Other steps are to create a culture that makes economic crime difficult to perpetrate; make use of IT-based techniques such as risk-evaluation packages, file interrogation techniques, and electronic recording; develop a reporting methodology that emphasizes succinctness, prioritization of conclusions, and recommended next steps; use principles for obtaining legal evidence; and recognize that good audit practice depends on the development of relevant knowledge.