Chapter 10, Problem 1.8C

What four methods of investigation constitute the fraud triangle plus inquiry approach to investigations?             1. Theft Investigative Methods             2. Conversion Investigative Methods             3. Concealment Investigative Method  4. Inquiry Investigative Methods This study examines the real world case of the Peregrine fraud. In this fraud, the CEO Russell Wasendorf, Sr. duped the auditors and the public for years. Wasendorf was able to carry out a fraud using an unsophisticated scheme involving falsified bank statements and falsified audit evidence. Only when an electronic confirmation services was used by the auditors did the fraud unravel. This case provides interesting discussion points for an auditing, fraud detection and deterrence, forensic accounting or ethics class. Students typically need one to two hours of time outside of class to complete the case and instructors should budget approximately one to one and a half hours of class time to discuss the case after…

Registered external auditors must have the knowledge and skills to perform their function and should be honest. There are also a number of other attributes or fundamental principles of ethical behavior, which all auditors should have and these are identified in professional external auditing standards issued by IRBA as follows:· integrity· objectivity· professional competence and due care· confidentiality· professional behaviorThe following actions taken by registered external auditors are example of non-compliance with one or more principles listed above;   Question 5 Scott Temple, the registered auditor in charge of the audit of Crookes Brothers Ltd, failed to identify themisapplication by the client of an important accounting policy. The misapplication resulted in a materialoverstatement of the company’s profit.

Registered external auditors must have the knowledge and skills to perform their function and should be honest. There are also a number of other attributes or fundamental principles of ethical behavior, which all auditors should have and these are identified in professional external auditing standards issued by IRBA as follows:· integrity· objectivity· professional competence and due care· confidentiality· professional behaviorThe following actions taken by registered external auditors are example of non-compliance with one or more principles listed above;   Question 2 Because the budget for the audit of Afrimat Ltd would be exceeded and because he felt that, he had acompetent audit team, A Smith the registered auditor in charge of the audit decided not to spend thenecessary time on reviewing the work papers of the audit team.