Chapter 8 Investigating Concealment 2019 Cengage All rights reserved To the Student Concealment investigation concerns discovering the ways perpetrators conceal their frauds It is the third side of the fraud triangle plus inquiry approach to investigations ID: 661353
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Fraud Examination
Fifth Edition
Chapter 8
Investigating Concealment
© 2019 Cengage
. All rights reserved
.Slide2
To the Student
Concealment investigation concerns discovering the ways perpetrators conceal their frauds. It is the third side of the fraud triangle plus inquiry approach to investigations.
As you read the chapter, think of ways in which different types of frauds are concealed and how they might be investigated.Slide3
Learning Objectives
Describe concealment investigation methods and how they relate to fraud
.Understand the value of documents and electronic records in a fraud investigation.List the different methods of obtaining documentary evidence.Understand how to perform discovery sampling to obtain documentary evidence.Explain how to obtain hard-to-get documentary evidence.Slide4
Aspects of Documentary Evidence (1 of 8)
Investigators must understand the following aspects of documentary evidence:
Chain of custody of documentsMarking of evidenceOrganization of the evidenceCoordination of documentary evidenceRules concerning original versus copies of documentsSlide5
Aspects of Documentary Evidence (2 of 8)
Chain of Custody of Documents
A record must be kept of when a document is received and what has happened to it since its receiptWhy is it important to maintain a chain of custody for documentary evidence?Slide6
Aspects of Documentary Evidence (3 of 8)
Marking the Evidence
A transparent envelope should be used to store the evidence, with the date received and the initials of the examiner written on the outsideA copy of the document should be made, and the original document should be stored in the envelope in a secure placeSlide7
Aspects of Documentary Evidence (4 of 8)
Organization of the Evidence
Evidence database should have the following:Creation dates of documentsSources of documentsDates when the documents were obtainedBrief descriptions of document contentsSubjects of documentsIdentifying or Bates numberSlide8
Aspects of Documentary Evidence (5 of 8)
Original Documents versus
PhotocopiesOriginals are preferable to photocopiesIn certain jurisdictions, only four situations permit photocopiesOriginal document has been lost or destroyedOriginal document is in the possession of an adverse partyOriginal document or record in the custody of a public officeOriginal documents are too voluminousSlide9
Aspects of Documentary Evidence (6 of 8)
Obtaining Documentary Evidence: Audits
Auditors conduct seven types of testsTests of mechanical accuracy (recalculations)Analytical tests (tests of reasonableness)DocumentationConfirmationsObservationsPhysical examinationsInquiriesSlide10
Aspects of Documentary Evidence (7 of 8)
Discovery sampling is the easiest of all statistical sampling variations to understand
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Aspects of Documentary Evidence (8 of 8)
Obtaining Documentary Evidence: Hard-to-Get Documentary
EvidenceThree ways to obtain documentary evidence:SubpoenaSearch warrantVoluntary consent