Course Modules:

Module I: Introduction to Forensic Audit, Applicable Laws & Regulatory Environment

[40 hours]

Learning Objectives: Creating awareness to participants regarding type of frauds, accountability for fraud prevention & detection, overview of Forensic audit and understanding of Legal framework

Learning Outcome: After successfully completing this Module, participants will be able to:

• Appreciate the concept, types of frauds
• Understand Regulatory framework
• Analyze Process of forensic audit
• Apply legal provisions

Contents

• Course Introduction, Business Fraud Scenario and Fraudster Profile
• Frauds related Basic Concepts
• Fraud as per Section 447 of Companies Act 2013
• Fraud Triangle, Types, Sector Classification
• Cyber-crime, Digital Incident Response
• Revenue Fraud, Expense fraud, Bribery, Kickback, Tax fraud
• Inventory Fraud, HR Fraud
• Forensic Audit Interview, Financial Statement Fraud Case Studies
• Case Studies on Banking Frauds
• Red Flags - Concepts and Techniques
• Red and Green Flags - Case Studies
• Domestic & International Fraud related Laws – Overview of Legal & Regulatory Framework, Forensic Auditor & Legal Environment (e.g., SEC, PCAOB, DOJ, NFRA, CBI, ED, SFIO etc.)
• FCPA (USA)
• PMLA
• IT Act, Digital Forensics & Cyber Laws
• PCPA 1988
• IBC 2016
• RBI, SEBI Guidelines
• Civil & Criminal Procedure
• Fugitive Economic Offenders Act 2018
• Internal Financial Controls (IFC) as per Companies Act 2013 (Sec 143, 134), Auditing Standards, Fraud under the Companies Act
• Fraud Reporting under section 143(12) of Companies Act 2013
• Fraud reporting to RBI CFMC via FRMS
• International Tax & Tax frauds – GAAR, BEPS, PoEM, Issues in Tax evasion
• Application of Mathematical Quantification in Forensic audit

Module II: Fraud Risk Management, Applicable Standards & Best Practices, Financial Forensics & Forensic Audit Techniques

[30 hours]

Learning Objectives: Enabling participants to identify business risks, risk of fraud, fraudulent transactions & indicators signifying different types of fraud

Learning Outcome: After successfully completing this Module, participants will be able to:

• Appreciate types of frauds
• Identify threats in Forensic audit and deploy safeguards
• Understand connect between Internal Controls and fraud deterrence
• Identify fraud risk indicator, red flags and green flags
• Manage fraud risk
• Conduct forensic audit

Contents

• Fraud Risk indicators
• Fraud Risk Management process
• Early Warning Indicators of fraud, Money laundering, misconduct
• Banking: Fraud Risk Assessment in Credit decisions
• Credit information analysis, indicators of Willful defaults
• Fraud investigation Role & scenario analysis
• Fraud Investigation and Engagement Processes
• Forensic audit plan, program, field work, evidence, Court proceedings, coordination with law enforcement agencies, engagement conclusion
• Fraud prevention & detection – Case Studies
• Frauds in IT / ERP environment, Computer & Cyber forensics
• Expert witness, Dispute Resolution
• Money Laundering, financial crimes in cross-border transactions
• Considering fraud in financial statement audit (ISA- 240)
• IIA Standards / Guidance on Fraud prevention / detection
• International best practices & Advisories in Forensic Audit
• Introduction to Data Extraction, Digital Forensics and Cyber Crime,
• Relative Size Factor (RSF), CAAT – Learning to implement RSF in Excel: Case Studies
• Use of Benford Law, Luhn's Algorithm- Case Studies
• Hollinger Clark Theory
• Using Excel in fraud risk analysis
• Data Mining: mining for susceptible transactions by shifting through transactions and filtering out transactions that are indicative of kick-backs, non-compliance with laws, rules or organizational policies, etc.
• Introduction to Generalized Audit Software (GAS IDEA)
• Features of IDEA, setting a Working Folder, Getting Data into IDEA
• Data Manipulation and Interrogation, Indexing, Sorting
• Navigating in the database (Go To), Display Items Containing (Display Criteria), Find, Search
• Field Manipulation, Extractions
• Analyzing Data and Audit tests, Detecting Gaps, Detecting Duplicates
• Forensic Lexicology: How to Analyse Words Like Numbers
• Forensic Indices
• Forensic Financial Analysis – manipulation and window-dressing of financial statements – potential techniques and detection patterns
• Valuation& Forensics-Why & How
• A Forensic Accounting Methodology to Support Counterterrorism

Module III: Fraud Examiner, Engagement Management, Documentation & Quality Control

[20 hours]

Learning Objectives: Enabling participants to understand and appreciate the Role of a Forensic auditor and fraud examiner, terms of engagement and managing assignments, how to conduct interviews and interact with Regulators, gathering Evidence and Forensic Audit Report drafting

Learning Outcome: After successfully completing this Module, participants will be able to:

• Carry out the role of fraud examiner
• Manage forensic audit engagements
• Coordinate and communicate with appointing authorities and Regulators
• Draft Forensic Audit Report
• Understand Documentation & Quality Control aspects

Contents:

• Fraud Prevention and Deterrence programs
• Risk, detection, Evidence & Response, Investigation
• Internal Control, COSO, COBIT, Control Effectiveness Index & Fraud incidence
• Financial fraud - field investigations
• Fraud Discovery, Methods & Techniques of investigations
• Interaction with Regulators
• Engagement Letter/ Terms of Reference
• Non-Disclosure Agreement (NDA)
• Coordination with Corporate Internal Audit function
• Using the services of an Expert
• The Evidence Collection Process
• Fraud Examination Evidence I: Physical, Documentary and Observational Evidence
• Fraud Examination Evidence II: Interview and Interrogation Methods
• The Fraud Report, Litigation, and the Recovery Process
• Profiling of key suspects and informants
• Using inputs from Whistle-blowers
• Interviewing: Questions about interviewing, taking statements, obtaining information from public records, tracing illicit transactions, evaluating deception and report writing
• Litigation Support
• Role of Internal Auditor in detecting frauds, Relevant Standards – SIA 11
• Engagement Terms, Quality Control and response in overseas international environment
• Documentation of observations
• Forensic Audit Report – structure, flow and drafting of observations, recommendations
• Willful defaults and Corporate Insolvency & Bankruptcy – emerging Forensic audit aspects
• Safety Risk management for Forensic auditor and engagement team – best practices

Module IV: Ethical Considerations, Code of Conduct in Fraud Examination & Forensic Audit, Professional Opportunities

[10 hours]

Learning Objectives: Enabling participants to identify, appreciate and uphold highest ethical Standards and considerations while performing Forensic audits and fraud examinations.

Learning Outcome: After successfully completing this Module, participants will be able to:

• Appreciate Quality control and ethical issues in Forensic Audit
• Identify indicators of conflict of interest and adhere to established Code of Conduct
• Apply professional standards in carrying out forensic audit engagement
• Demonstrate highest professional Conduct in forensic audit manifesting ethical considerations

Contents :

• Criminology and Ethics
• Ethical Hacking – White Hat hackers – intent, approach and techniques
• Threats to Ethical conduct
• Objectivity, independence and Integrity
• Code of Conduct for fraud examiner
• Corporate Code of Ethics Policy
• Vigilance Mechanism, Business Control environment – COSO & COBIT
• Whistleblower Policy, Organizational Fraud reporting system
• Development of Anti-fraud policy
• Financial Intelligence Unit, CERT-In
• Role of CBI, ED and interface with forensic audit
• Financial Action Task Force
• Corporate Compliance and Ethics Program as a preventive control
• Anti-Bribery Standard - ISO 37001: Implementation and Audit Checklists