AYB115 Governance, Fraud and Investigation

Forensic accountants (FA’s) all over Australia are contracted by clients to provide expert witness statements on particular matters. The APES 215 states that a forensic accountant: (APESB, 2019) : Has a duty to the court which overrides that of the client   Provide expertise in an objective and unbiased manner   Not to advocate for a party Therefore, an FA’s duty is to the court in providing evidence based on expertise in particular court matters and not determining an innocent or guilty verdict. The FA’s role is to investigate the quantification of loss or damages due to a guilty verdict. In most cases the investigation of damages is for their client, but in some matters, FA’s could be contracted to cross-examine work completed by another FA (such as in Labelmakers Group Pty Ltd v LL Force PtyLtd [2012] ). But how does a FA calculate the loss or damages for the successful plaintiff? Let’s say for instance a doctor is inappropriately performing their duty and kno...

The role of the board of directors and CEO’s is to ensure the appropriate running and management of a corporation, while also protecting the interests of the shareholders. The Corporations Act 2001 s.769B determines that a director may be held personally liable for the conduct of employees.  Even if the directors are unaware of any breaches, it is their role/duty to ensure that all members are compliant with the relevant laws and regulations. Similar to a parent-child relationship, for instance; a parent may not know their child was shoplifting, but will still have to face consequences of paying the fines, and having their parenting under fire. Hence, if the board and CEO are not fulfilling their duties appropriately, they are to be prosecuted as well, unless they can establish that they exercised due diligence. The Royal Commission into the banking and financial services sector found several crimes had been committed including; alleged bribery, forged documentation, charging t...

A majority forensic accountant cases do not materialise to any formal litigation, so unsurprisingly, many cant see the reason to at least basically understand the Australian legal system.  However, when the time does come and the forensic accountant is required by the court to be an expert witness and provide a report of findings, the knowledge of the court system would prove vital.  Without knowing at least, the basic differences of these matters, it is easy to make errors which could lead to the whole report being “thrown out” by the court. When you are on the stand providing your findings with the barristers “firing” questions at you, ignorance of the law is no excuse for mistakes you make.  For instance, if you were caught spray painting the side of a building without consent from the owners and used the excuse that you didn’t know you were  able to express your artistic style wherever you pleased…you would be laughed out of the courtroom. The same goes for foren...

Within the modern business environment there is a daily exchange of sensitive information between organisations and; employees, suppliers, customers etc. The best way to manage the continual threats of fraud risk is the proper implementation of IT governance systems  (Antonakopoulou, 2012) .  Although having up-to-date access control measures in place is important, it would be foolish to purely rely on it. For example: your business may have strict access control measures in place which require multi-factor authentication. However, most devices may only require a short pin or a simple question about yourself. Within the current environment this kind of information is far too easy to access. On top of this there is also the large problem associated with human error. How many times have you had to write down a password, just because you struggle to remember it? All it takes is one person to look over your shoulder or fish it out a bin to gain access to the companies most private...

In a survey conducted by Price Waterhouse Coppers , it was determined that over a third of businesses have been impacted by fraud within the last two years  (PwC, 2020) . Businesses have shown that without the appropriate governance systems, organisations fall susceptible to various risks, due to the lack of appropriate decision making, accountability and values within top management.  Although, hiring only ethical employees would theoretically prevent internal fraud, the way employees behave comes down to the values management instil in the business. I experienced this where a new employee appeared to be ethical during the hiring process, however in a way to get back at management due to working longer hours, they began to take small amounts of money out of the cash register.  The COBIT-5 toolset demonstrates that a holistic approach is required to ensure efficiency, security and success. It notes that, people within the corporation are a significant risk in regards to ...