How to Master Remote Auditing – Fraud and Management Override

Auditing to address the risk of fraud and management override of control benefits from face-to-face interactions and the ability for auditors to follow their intuition.

When remote auditing, data analytics and artificial intelligence techniques provide a vital supplement to auditing this risk.

A key part of the audit involves analysing transactions to identify risks of fraudulent entries to the system.

Performing such procedures on journals to prepare financial statements, or on partial system extracts of “manual journals”, is rarely an acceptable approach.

Fraudsters are sophisticated and fraud can be perpetrated at any time. An effective audit approach must therefore review every single transaction, automated or manual, which underpins the financial statements.

Our recommended steps for designing an effective and robust testing strategy

  1. Extract transactional data
  2. Transform data
  3. Verify the validity and completeness of data
  4. Define the population for testing
  5. Identify high-risk transactions for testing
  6. Investigate and test high-risk transactions
  7. Document your work

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