07 Jul Decision 6
1) The text presents only limited discussion about the typical fraudster and what types of people tend to perpetrate fraud. It also doesn’t discuss signs that an individual fraudster might exhibit when they are perpetrating fraud. I would like you to discuss the types of people you think might perpetrate a fraud and some behavioral indicators that they might exhibit. That is, I want you to discuss ways to spot people that might commit fraud before they do as well as behaviors them might exhibit while they are committing fraud. Since this material isn’t covered in the text, feel free to do some outside research. However, since you are working on your midterms, I don’t want to turn this into a major research project either. Just discuss a few issues and let’s see if we can build a more complete picture with discussion posts.
Hint: The focus of this question is on profiling fraudsters in advance of their actually committing fraud. This question does not refer to the fraud triangle, which covers factors that facilitate fraud. It is asking are their systematic differences between people who tend to commit fraud and those that don’t that can be used to identify people who might be more likely to commit fraud.
2) The text discusses two major types of fraud that auditors should be concerned about – financial reporting fraud and asset misappropriation fraud. I would like to trigger on open-ended discussion of the differences between these two types of fraud and how those differences affect the detection of each type. Discuss one difference in how these two types of fraud might be motivated using the fraud triangle and one difference in how they might be detected. Your discussions should include how the differences might affect the audit.
Hint: The purpose of this question is to get you to think about who tends to commit the different types of fraud and their motives as well as the actions fraudsters take when perpetrating each type of fraud and how auditors can use this knowledge to detect each type of fraud.
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