Not only academic studies, but also many sources from commercial practice stress the fundamental importance of the sensibilization of management and employees to fraud risks. It is just as vital to conduct a focused sensibilization and training program for company auditors.
The Standards for the Professional Practice of Internal Auditing (1210.A2) state that the internal auditor should have sufficient knowledge to identify the indicators of fraud. In the real world, however, expectations are significantly higher: Internal auditors need be able to do more than identify indicators, they also have to be able to fully investigate actual cases, take appropriate preventative action and provide the organization with expert fraud consulting.
There are a number of awareness-increasing measures that can be taken in order to prepare company auditors for their role in this area. The benefits of such training are many and varied, for example:
- Addressing the topic of economic criminality and highlighting the dimensions and consequences of fraud in companies increases awareness and stimulates discussion on the subject
- The legal boundaries of acceptable employee conduct are set out
- Employees learn to recognize both indications of fraudulent activity and the vulnerable areas within the organization
A detailed description of employee fraud awareness training can be found in the section: Services for Companies – Training.
In addition to sensibilization, audit department employees also need training to develop their knowledge of economic criminality and the methodology used to combat it. Relevant subject areas include:
- Economic criminality – facts, figures, data
- Economic criminality – regulatory requirements
- Commercial criminal law – fundamentals
- Overview of the relevant regulations and legislation
- Perpetrator profiles and characterizing factors
- Legal responsibilities within an enterprise
- Legal consequences of criminal acts
- Sanctions that can be taken against companies
- Detailed depiction of the elements of a commercial criminal offense
- Criminal proceedings – fundamentals
- Official investigations within a company – conduct while carrying out searches
- Roles and functions of internal audit departments in dealing with economic criminality
- Overview of the specific roles within a project and how they contribute to combating economic criminality
- Relevant civil and employment law
- Duty of reporting and disclosure for employees and internal audit
- Scope of internal investigations
- Anti-fraud projects: what to do in cases of suspicion
- Anti-fraud projects: problems in practice and their solutions
- Documentation requirements
- Cooperation with external third parties
- Project organization where external third parties are involved
- Protecting forensic data for further analysis
- Fraud risk assessment
- Consulting by the internal audit department (prevention/sensibilization)
- Fraud due diligence audit
It is, of course, also important to provide training in the use of today’s leading IT data analysis tools (e.g. IDEA and ACL) and content management tools (e.g. Convera) as well as data mining tools for unstructured data (e.g. 12) etc.
When internal audit employees are appropriately trained, this alone is enough increase the risk of detection for perpetrators of fraud by around 10 percent.
The AuditFactory can provide training for the members of your internal audit department including fraud awareness and anti-fraud theory and methodology. We offer:
- Open seminars or in-house training
- Partnership or coaching arrangements where we work together with your internal audit department on specific projects