teknik mengungkapkan fraud
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TEKNIK MENGUNGKAPKAN TEKNIK MENGUNGKAPKAN
FRAUD DALAM MENINGKATKANFRAUD DALAM MENINGKATKANEFEKTIFITAS PENGENDALIANEFEKTIFITAS PENGENDALIAN
INTERN PERUSAHAANINTERN PERUSAHAAN
KHAIRIANSYAH SALMANKHAIRIANSYAH SALMAN
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AGENDA PRESENTASI AGENDA PRESENTASI
Tujuan Presentasi Tujuan Presentasi
Konsep DasarKonsep Dasar
FraudFraud
Internal ControlInternal Control Audit Investigatif Audit Investigatif
Strategi Pencegahan dan PengendalianStrategi Pencegahan dan PengendalianFraudFraud
Teknik Audit Investigatif Teknik Audit Investigatif
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F R A U DF R A U DB A S I C C O N C E P T SB A S I C C O N C E P T S
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FRAUD!!! FRAUD!!!
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FRAUD FAST FACTS FRAUD FAST FACTS
•• Annual estimated fraud losses: $660 billion Annual estimated fraud losses: $660 billion
•• Most fraudsters are firstMost fraudsters are first--time offenderstime offenders
•• Amount of loss is directly related to Amount of loss is directly related to
fraudster’s position in the organizationfraudster’s position in the organization•• Most frauds are detected by tipsMost frauds are detected by tips
•• Deterrence is key Deterrence is key
Source:Source: ACFE’s ACFE’s 2004 Report to the Nation on Occupational Fraud and2004 Report to the Nation on Occupational Fraud and Abuse Abuse
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THE FRAUD TRIANGLE. THE FRAUD TRIANGLE.
P e r c e i v
e d P
r e s s u r e R
a t i o
n a l i z a
t i o n
Perceived Opportunity
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THE FRAUD TRIANGLE. THE FRAUD TRIANGLE.
Perceived PressurePerceived Pressure Situasi dimana seseorang meyakini bahwa mereka ituSituasi dimana seseorang meyakini bahwa mereka itu
karena kebutuhan merasa perlu untuk melakukankarena kebutuhan merasa perlu untuk melakukanFraudFraud
Perceived Opportunity Perceived Opportunity Situasi dimana seseorang meyakini bahwa adanyaSituasi dimana seseorang meyakini bahwa adanya
kesempatan atau kondisi yang menjanjikankesempatan atau kondisi yang menjanjikankeuntungan jika melakukan fraud dan tidak terdeteksikeuntungan jika melakukan fraud dan tidak terdeteksi
RationalizationRationalization Suatu bentuk pemikiran yang menjadikan seseorangSuatu bentuk pemikiran yang menjadikan seseorang
yang melakukan fraud merasa bahwa sikap curangyang melakukan fraud merasa bahwa sikap curang
tersebut dapat diterima.tersebut dapat diterima.
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ELEMENTS OF FRAUDELEMENTS OF FRAUD
TRIANGLE. TRIANGLE.
Elements
Of
Fraud
Conversion
Concealment Theft
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CATEGORIES OF FRAUD:CATEGORIES OF FRAUD:
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RED FLAGS FOR FRAUD RED FLAGS FOR FRAUD
No vacationNo vacation
Voluntary overtime Voluntary overtime
Unexplained variancesUnexplained variances
ComplaintsComplaintsNo reconciliationNo reconciliation
One employee “does it all”One employee “does it all”Documentation is not originalDocumentation is not original
“Rush” requests“Rush” requests
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DETECTION OF FRAUD DETECTION OF FRAUD •• 40%40% Tips Tips
•• 24%24% Internal AuditInternal Audit
•• 21%21% By accidentBy accident
•• 18%18% Internal controlsInternal controls
•• 11%11% External auditExternal audit
•• 1%1% OtherOther
Source:Source: ACFE’s ACFE’s 2004 Report to the Nation on Occupational Fraud and Abuse2004 Report to the Nation on Occupational Fraud and Abuse
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IF YOU SUSPECT FRAUD….IF YOU SUSPECT FRAUD….
Do NotDo Not confront the personconfront the person
Do NotDo Not talk about it with cotalk about it with co-- workers workers
Do NotDo Not try to verify fraud has taken place ortry to verify fraud has taken place or
catch them on your own.catch them on your own.
DODO call Internal Audit,call Internal Audit, ExpertsExperts inin
objective verification of the factsobjective verification of the facts
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INTERNAL CONTROLINTERNAL CONTROL
BASIC CONCEPTSBASIC CONCEPTS
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WHAT IS INTERNAL CONTROL WHAT IS INTERNAL CONTROL ? ?
Internal control is aInternal control is a processprocess, effected by an entity’s, effected by an entity’s
board of directors (regents), management and otherboard of directors (regents), management and otherpersonnel, designed to providepersonnel, designed to provide reasonablereasonable assuranceassurance
regarding the achievement of the followingregarding the achievement of the following
objectives:objectives: Effectiveness and efficiency of operationsEffectiveness and efficiency of operations
Reliability of financial reporting Reliability of financial reporting
Compliance with applicable laws and regulationsCompliance with applicable laws and regulations
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INTERNAL CONTROL KEYINTERNAL CONTROL KEY
CONCEPTS CONCEPTS
Internal control is aInternal control is a “ “ process process ”.”. It’s a means to an end,It’s a means to an end,not an end in itself.not an end in itself.
Internal control is affected byInternal control is affected by “ “ people people ”.”. It’s not merelyIt’s not merelypolicy manuals and forms, but people at every level ofpolicy manuals and forms, but people at every level ofthe organization.the organization.
Internal control can be expected to provide onlyInternal control can be expected to provide only“ “ reasonable assurance reasonable assurance ”,”, not absolute assurance, to annot absolute assurance, to an
entity’s management and board.entity’s management and board. Internal control is geared to the achievement of theInternal control is geared to the achievement of the
entity’sentity’s “ “ objectives objectives ” ” ..
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INTERNAL CONTROL KEYINTERNAL CONTROL KEY
CONCEPTS (CONT.)CONCEPTS (CONT.)
Management, not auditors, must establish andManagement, not auditors, must establish and
maintain the entity’s controlsmaintain the entity’s controls
No system can be regarded as completelyNo system can be regarded as completelyeffectiveeffective
Should be applied to both manual andShould be applied to both manual and
computerized systemscomputerized systems
Are implemented to protect the employee Are implemented to protect the employee
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TYPES OF INTERNAL TYPES OF INTERNAL
CONTROLSCONTROLS
Directive Controls Directive Controls – – encourage goodencourage good
behavior, it’s the right thing to dobehavior, it’s the right thing to do Incentive plansIncentive plans
Recognition awardsRecognition awards
Training Training
Policies and ProceduresPolicies and Procedures
PromotionsPromotions
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TYPES OF INTERNAL TYPES OF INTERNAL
CONTROLSCONTROLS
Preventative Controls Preventative Controls – – prevent undesirableprevent undesirable
events from occurring events from occurring Knowledge that someone is reviewing your work Knowledge that someone is reviewing your work
Segregation of dutiesSegregation of duties
Limited accessLimited access
Levels of authorizationLevels of authorization
Security badgesSecurity badges Business rule setBusiness rule set--up in automated systemsup in automated systems
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TYPES OF INTERNAL TYPES OF INTERNAL
CONTROLSCONTROLS
Detective Controls Detective Controls – – detect and correctdetect and correct
undesirable events after they occur.undesirable events after they occur. ReconciliationsReconciliations
Auditing Auditing
ConfirmationsConfirmations
Exception reportsException reports
Reviews done on a regular basisReviews done on a regular basis
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TYPES OF INTERNAL TYPES OF INTERNAL
CONTROLSCONTROLS
Mitigating Controls Mitigating Controls – – Mitigate for theMitigate for the
lack of an expected control.lack of an expected control. CashCash handlinghandling – – lack of adequate staff forlack of adequate staff for
proper segregation of dutiesproper segregation of duties – – sharing withsharing with
another areaanother area Software security/accessSoftware security/access – – regular monitoringregular monitoring
of access for certain employees when softwareof access for certain employees when software
security is not adequate because of functionalsecurity is not adequate because of functionalconstraints.constraints.
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INTERNAL CONTROLS CANINTERNAL CONTROLS CAN
FAIL BECAUSE:FAIL BECAUSE:
Employees can make mistakes or exerciseEmployees can make mistakes or exercisepoor judgmentpoor judgment
There can be collusion There can be collusion – – where two or more where two or more
individuals work together to stealindividuals work together to steal Management may inappropriately overrideManagement may inappropriately override
established policies orestablished policies or procedures.procedures.
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Key Control Activities Key Control Activities
Control
Environment
Control Over
Assets & Information
Systems
Monitoring
Authorization,
Approvals, Verifications
Segregation
of Duties
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WHAT ARE RISKS? WHAT ARE RISKS?
A risk is anything that could jeopardize the A risk is anything that could jeopardize theachievement of your organization’s objective to:achievement of your organization’s objective to:
Achieve your goals Achieve your goals
Operate effectively and efficiently Operate effectively and efficiently Protect theProtect the Organization’sOrganization’s assets from lossassets from loss
Provide reliable financial dataProvide reliable financial data
Comply with applicable laws, policies, andComply with applicable laws, policies, and
proceduresprocedures
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IDENTIFYING YOUR RISKSIDENTIFYING YOUR RISKS
Questions to ask yourself:Questions to ask yourself: What can go wrong? What can go wrong?
How could someone steal from us?How could someone steal from us?
What laws or regulations would be violated? What laws or regulations would be violated? What policies most affect us? What policies most affect us?
What types transactions/activities in our area expose us What types transactions/activities in our area expose us
to the greatest risk?to the greatest risk? How can someone bypass the internal controls?How can someone bypass the internal controls?
What potential risks could cause adverse publicity? What potential risks could cause adverse publicity?
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FRAUDFRAUD RISK MODELRISK MODEL
Attitude/
rationalization
Opportunity
Incentive/pressure
High Risk
Medium
Risk
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INVESTIGATIVEINVESTIGATIVE AUDIT AUDIT
B A S I C C O N C E P T SB A S I C C O N C E P T S
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PERSPECTIVE OFPERSPECTIVE OF
INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
Financial StatementFinancial StatementAuditAudit
Performance AuditPerformance Audit
Investigative AuditInvestigative Audit
ManagementManagementAssertion on F/SAssertion on F/S
•• EfficiencyEfficiency
•• EffectivenessEffectiveness
•• EconomyEconomy
•• LossesLosses
•• Criminal OffencesCriminal Offences
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AXIOMS OF AXIOMS OF
INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
AXIOMSAXIOMS
EXISTENCE OF FRAUD EXISTENCE OF FRAUD
REVERSE PROOF REVERSE PROOF FRAUD IS HIDDEN FRAUD IS HIDDEN
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FRAUD IS HIDDEN FRAUD IS HIDDEN Unlike other offenses, part of the method of fraudUnlike other offenses, part of the method of fraud
is to conceal its existenceis to conceal its existence
NNo opinion should be given to any person thato opinion should be given to any person thatfraud does or does not exist within a specificfraud does or does not exist within a specificenvironment.environment.
The methods for concealing fraud are so The methods for concealing fraud are sonumerous and sometimes ingenious that almostnumerous and sometimes ingenious that almostanyoneanyone — — even the examinereven the examiner — — might be defrauded.might be defrauded.
Offering opinions might leave the examinerOffering opinions might leave the examinerpersonally vulnerable to legal problemspersonally vulnerable to legal problems
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REVERSE PROOF REVERSE PROOF The examination of fraud matters is approached The examination of fraud matters is approached
from two perspectives. To prove that a fraud hasfrom two perspectives. To prove that a fraud hasoccurred, the proof must include attempts to proveoccurred, the proof must include attempts to proveit has not occurred.it has not occurred.
The reverse is also true. In attempting to prove fraud The reverse is also true. In attempting to prove fraudhas not occurred, that proof must also attempt tohas not occurred, that proof must also attempt toprove that it has. The reason is that both sides ofprove that it has. The reason is that both sides offraud must be examinedfraud must be examined
Under the law, proof of fraud must preclude anyUnder the law, proof of fraud must preclude anyexplanation other than guilt.explanation other than guilt.
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EXISTENCE OF FRAUD EXISTENCE OF FRAUD The examiner must not express opinions on The examiner must not express opinions on
the guilt or innocence of any person or party.the guilt or innocence of any person or party. In resolving fraud issues, the examiner mustIn resolving fraud issues, the examiner must
postulate a theorypostulate a theory — — guilt or innocenceguilt or innocence — — inin
order to attempt to prove that theory.order to attempt to prove that theory. Any discussion of guilt or innocence is only a Any discussion of guilt or innocence is only a
part of that theory; the examiner must notpart of that theory; the examiner must not
make statements that could be construed tomake statements that could be construed tobe conclusive in regard to the theory.be conclusive in regard to the theory.
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INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
METHODOLOGY METHODOLOGY Investigative AuditInvestigative Audit methodology requires thatmethodology requires that
all fraud allegations be handled in a uniform,all fraud allegations be handled in a uniform,legal fashion and be resolved on a timely basislegal fashion and be resolved on a timely basis..
The The Investigative AuditInvestigative Audit methodology gathersmethodology gathersevidence from the general to the specificevidence from the general to the specific..
At each step of the At each step of the Investigative AuditInvestigative Audit process, process,the evidence obtained and the fraud theorythe evidence obtained and the fraud theoryapproach continually is assessedapproach continually is assessed
The investigation of fraud, because it deals with The investigation of fraud, because it deals withthe individual rights of others, must bethe individual rights of others, must beconducted only with adequate cause orconducted only with adequate cause or
PREDICATIONPREDICATION..
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PREDICATIONPREDICATION T The totality of circumstances that wouldhe totality of circumstances that would
lead a reasonable, professionally trained,lead a reasonable, professionally trained,and prudent individual to believe a fraudand prudent individual to believe a fraud
has occurred, is occurring, and/or willhas occurred, is occurring, and/or will
occuroccur..
Predication is the basis upon which anPredication is the basis upon which an
examination is commenced.examination is commenced. Investigative AuditInvestigative Audit should not beshould not be
conducted without proper predicationconducted without proper predication..
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INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
PROCESSPROCESS Analyzing Available Analyzing Available
DataData
Creating a HypothesisCreating a Hypothesis Testing the Hypothesis Testing the Hypothesis
Refining and AmendingRefining and Amending
the Hypothesisthe Hypothesis ObservationObservation
DocumentDocument ExaminationExamination
Interview Interview Neutral third PartiesNeutral third Parties
Corroborative WitnessesCorroborative Witnesses
Co ConspiratorsCo Conspirators
SubjectSubject
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FRAUD PREVENTIONFRAUD PREVENTION
AND CONTROL AND CONTROL
STRATEGY STRATEGY
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COMBATING FRAUDCOMBATING FRAUD
STRATEGY.STRATEGY.
PREVENTIVE DETECTIVE REPRESSIVE
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Give no chance
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If fraud
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Minimizing
Losses, get the
Fraudster and
Revise control weakness
A tif d P I l t ti Pl
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Step 1:
Create a Baseline:• Assess Existing Antifraud
Programs & Controls
• Develop & Remediate Plan
Step 2:Organize a Fraud and
Reputation-Risk Assessment
Antifraud Program Implementation Plan
Step 2.2:
Determine Units &
Locations to Assess
Step 2.1:
Organize Assessment
by Business Cycle or
Separate Fraud Cycle
Step 2.3:
Identify Potential Fraud
Misconduct Schemes &
Scenarios
Step 2.4:
Assess Likelihood of Fraud
and Significance of Risk
Step 2.5:
Link Antifraud
Control Activities
Step 3:Evaluate & Test Design &
Operating Effectiveness
Step 4:
Address Residual Risks
Step 5:
Standardize Process for
Incident Investigation and
Remediation
• Disciplinary & legal action
• Recovery/restoration of losses & other
damages
• Consideration of how and why fraud occurred
• Determination of whether controls were non-existent, circumvented, and/or overridden
• Explanation to senior management and auditcommittee regarding likelihood of recurrence
IA Whitepaper
Appendix A
IA Whitepaper
pp. 30-32
IA Whitepaper
pp. 29
IA Whitepaper
pp. 17-25
Key Elements of
Antifraud Whitepaper
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INVESTIGATIVEINVESTIGATIVE AUDIT TECHNIQUES AUDIT TECHNIQUES
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INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
TECHNIQUES TECHNIQUES
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EFFECTIVE INVESTIGATIVE AUDITEFFECTIVE INVESTIGATIVE AUDIT
WILL IMPROVE CONTROL WILL IMPROVE CONTROL
Organizational
PROCESS
In place
INVESTIGATION
INTELLIGENCE
About Risk
CHANGE TO PROCESS
& AUDIT PROGRAM
FINDINGS AND
RECOMMENDATIONS
PREDICTIONS
IMPROVEMENT ALLEGATIONS
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WHY CORPORATE NEED TO WHY CORPORATE NEED TO
INVESTIGATE FRAUD EFFECTIVELY INVESTIGATE FRAUD EFFECTIVELY
Enforcing the Law by Catching the FraudsterEnforcing the Law by Catching the Fraudster
Minimising losses by confiscating fraudsterMinimising losses by confiscating fraudsterassetsassets
Lesson Learning to improve internal control.Lesson Learning to improve internal control.
Revise system and proceduresRevise system and procedures
Analyze Human Resources Management Analyze Human Resources Management
Develop management tone in sense of combatingDevelop management tone in sense of combating
fraud.fraud.
To deter potential fraudster To deter potential fraudster
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INVESTIGATIVE AUDITINVESTIGATIVE AUDIT
TECHNIQUES TECHNIQUES Investigation consists of performing theInvestigation consists of performing the
extended procedures necessary to determine theextended procedures necessary to determine theoccurrence of fraud (as suggested by theoccurrence of fraud (as suggested by theindicators).indicators).
Investigation includes gathering sufficientInvestigation includes gathering sufficient
evidence about specific details of a discoveredevidence about specific details of a discoveredfraudfraud..
Basic investigative audit techniques:Basic investigative audit techniques:
Document examination;Document examination; ObservationObservation
Interview Interview
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DOCUMENTDOCUMENTEXAMINATIONSEXAMINATIONS
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ANALYZING DOCUMENT ANALYZING DOCUMENT Every Financial Fraud usually deal withEvery Financial Fraud usually deal with
documentary evidence.documentary evidence.
The goal of document analyzing is to make The goal of document analyzing is to makecertain that all relevant documents are included,certain that all relevant documents are included,and all irrelevant documents eliminated.and all irrelevant documents eliminated.
It is critical to understand the relevance of thisIt is critical to understand the relevance of thisevidence, and how it should be preserved andevidence, and how it should be preserved and presented. presented.
documents can either help or hurt a case,documents can either help or hurt a case,
depending on which ones are presented anddepending on which ones are presented andhow they are presentedhow they are presented
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HOW WE GET EVIDENCES ?HOW WE GET EVIDENCES ?
Evidence comes in 2 forms:
witness and record(document or electronic file):
The statements of witnesses
will have to be corroboratedby records and
Tendering records asevidence will require awitness to authenticate therecord.
RULES ON COLLECTING ANDRULES ON COLLECTING AND
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RULES ON COLLECTING ANDRULES ON COLLECTING AND
HANDLING EVIDENCEHANDLING EVIDENCE Obtain originalObtain original
documents wheredocuments where
feasible. Make workingfeasible. Make workingcopies for review, andcopies for review, andkeep the originalskeep the originalssegregated.segregated.
Do not touch originalsDo not touch originalsany more than necessary;any more than necessary;they might later have tothey might later have toundergo forensicundergo forensic
analysis.analysis. Maintain a good filingMaintain a good filing
system for thesystem for thedocumentsdocuments
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RECORDS:RECORDS:
The primary concern is the potential of
destruction or alteration;
Records in hard copy format (document) are less
at risk to alteration but more difficult to searchon for key information;
Records in electronic format (databases) are
more at risk to alteration/deterioration and
should be backed up. The ability to search on
key terms is enhanced using investigative
software.
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INFORMATIONINFORMATION MANAGEMENTMANAGEMENT
Ensuring valuable evidence islocated and acted upon; and
Ensuring the integrity of the
Forensic Report by sourcing
the conclusions and tables tospecific records.
Managing the vast amounts
of documents and electronic datais essential for 2 reasons:
ELECTRONIC MANAGEMENTELECTRONIC MANAGEMENT
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ELECTRONIC MANAGEMENT:ELECTRONIC MANAGEMENT:
Scanning creates a
picture file;
OCR creates a text file;
Words are arranged into
a comprehensive
database whichfacilitates searching;
Massive volumes of data
can be condensed onto
CD’s; Court presentation is
enhanced.
D m nt in ti ti nDocument investigation:
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Document investigation:Document investigation:
Consider the following:
The “source” of the document (who
created it);
The “context” of the document (what
is the purpose of the document); The “reliability” of the document (can
the information be corroboratedelsewhere).
EXAMINING FRAUDULENTEXAMINING FRAUDULENT
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EXAMINING FRAUDULENTEXAMINING FRAUDULENT
DOCUMENTSDOCUMENTS Detection of forged signaturesDetection of forged signatures
Identification of the writers of signatures.Identification of the writers of signatures.handwriting, and hand printing.handwriting, and hand printing.
Detecting altered documentsDetecting altered documents
Detecting and restoring erasures andDetecting and restoring erasures and
eradications .eradications . Determining when a document was or was notDetermining when a document was or was not
prepared. prepared.
Detecting counterfeited documents andDetecting counterfeited documents andexamining printed documents.examining printed documents.
Detecting and restoring faint indented writings.Detecting and restoring faint indented writings.
Comparisons of paper and inks.Comparisons of paper and inks.
DETECTION OF FORGEDDETECTION OF FORGED
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DETECTION OF FORGEDDETECTION OF FORGED
SIGNATURESSIGNATURES
ORIGINAL SIGNATURE
TRACED FORGERY
SIMULATED FORGERY
FREEHAND FORGERY
EXAMINING FRAUDULENTEXAMINING FRAUDULENT
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EXAMINING FRAUDULENTEXAMINING FRAUDULENT
DOCUMENTSDOCUMENTS Determining whether two sheets of paper cameDetermining whether two sheets of paper came
from the same tablet or pad of paper.from the same tablet or pad of paper.
Examinations of paper folds and sequence ofExaminations of paper folds and sequence offolds. Comparisons of torn or cut paper edges.folds. Comparisons of torn or cut paper edges.
Restoration of charred and partially burnedRestoration of charred and partially burned
documents.documents. Identifying the machine that made a photocopyIdentifying the machine that made a photocopy
and whether two copies were made on the sameand whether two copies were made on the same
machine.machine. Examinations of facsimile (fax) copies.Examinations of facsimile (fax) copies.
Identifying the source of, or alterations to,Identifying the source of, or alterations to,notary seals, wax seals and cachetsnotary seals, wax seals and cachets
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EXAMINING FRAUDULENTEXAMINING FRAUDULENT
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EXAMINING FRAUDULENTEXAMINING FRAUDULENT
DOCUMENTSDOCUMENTS Detecting the opening and resealing ofDetecting the opening and resealing of
sealed documents and examiningsealed documents and examiningadhesives.adhesives.
Detecting inserted text in typewritten,Detecting inserted text in typewritten,
printed, or handwritten documents. printed, or handwritten documents. Determining the sequence of handwrittenDetermining the sequence of handwritten
text, signatures, and typewriting.text, signatures, and typewriting.
Identifying rubber stamp impressions.Identifying rubber stamp impressions. Identifying mechanical check Identifying mechanical check -- writer and writer and
numbering device impressionsnumbering device impressions
INVESTIGATIVE CONSIDERATIONSINVESTIGATIVE CONSIDERATIONS
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Evidence is not unidirectional:
you may start the trail at the
end rather than the beginning;
Stay focused on the purpose ofthe investigation-ignore side
trails;
Periodically review the
evidence with others as it may
allow you to see new avenues
(brainstorm!)
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OBSERVATIONOBSERVATION
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DEFINITIONDEFINITION Observation is the use of the senses to assess certainObservation is the use of the senses to assess certain
activities. (Arens Loebecke :activities. (Arens Loebecke : Auditing, an Integrated Auditing, an Integrated Approach) Approach)
Investigating Fraud use observation in covertInvestigating Fraud use observation in covertexamination whichexamination which designed to obtain evidence bydesigned to obtain evidence by
use of agents whose true role is undisclosed to theuse of agents whose true role is undisclosed to thetarget.target.
Bare in mind, “ FRAUD IS HIDDEN”, DISCLOSEBare in mind, “ FRAUD IS HIDDEN”, DISCLOSE
ANY TECHNIQUES CAN RUIN THE ANY TECHNIQUES CAN RUIN THEINVESTIGATION…!!!INVESTIGATION…!!!
COVERT OPERATIONCOVERT OPERATION
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COVERT OPERATIONCOVERT OPERATION
Undercover operationsUndercover operations
seek to develop evidenceseek to develop evidence
directly from peopledirectly from people
involved in the offenseinvolved in the offensethrough the use ofthrough the use of
disguise and deceit.disguise and deceit.
Rather than waiting forRather than waiting for
the information to comethe information to comeby other routes, there is aby other routes, there is a
conscious decision toconscious decision to
seek it out.seek it out.
SurveillanceSurveillance
operations use theoperations use the
skills of observationskills of observation
to determine activityto determine activity
of individuals.of individuals.
The surveillance The surveillance
operation is designedoperation is designed
to gather information.to gather information.
There are two major forms of covert operations: There are two major forms of covert operations:undercover operations undercover operations andand surveillance operations surveillance operations
COVERT OPERATIONCOVERT OPERATION
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COVERT OPERATIONCOVERT OPERATION
Used in a timely mannerUsed in a timely manner
with great care, a covert with great care, a covertoperation can produceoperation can produceresults that cannot beresults that cannot beachieved in any other way.achieved in any other way.
Used incorrectly orUsed incorrectly or
handled badly, coverthandled badly, covertoperations can lead tooperations can lead todeath, injury, seriousdeath, injury, seriousfinancial liability, andfinancial liability, and
embarrassment.embarrassment.
Covert operations require the highest degreeCovert operations require the highest degreeof skill and planning.of skill and planning.
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COVERT OPERATIONCOVERT OPERATIONCovert operationsCovert operations
cannot be conducted ascannot be conducted as“fishing expeditions.”“fishing expeditions.”
Justification for Justification forconducting theconducting the
operation must beoperation must belegally sound andlegally sound anddefensible and must notdefensible and must not
violate a person’s violate a person’s
reasonable expectationreasonable expectationof privacy.of privacy.
COVERT OPERATIONCOVERT OPERATION
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OBJECTIVESOBJECTIVES
To obtain evidence of a Past,To obtain evidence of a Past,
Current, Future crime Current, Future crime .. To identify those engaged in possibleTo identify those engaged in possible
illegal activity illegal activity .. To recover illegal gains To recover illegal gains
To identify co To identify co - - conspirators conspirators To identify the modus operandi To identify the modus operandi
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BACK THE OPERATION UP !!!BACK THE OPERATION UP !!! Prior to an undercoverPrior to an undercover
operation, itoperation, it isis essentialessential
that the basis for thethat the basis for theoperation be committedoperation be committedto writing, in memo formto writing, in memo form which should clearly which should clearlystate :state : The information upon The information upon
which the covert operation which the covert operation will be based. will be based.
The information that is The information that isexpected to be gainedexpected to be gained
from the operation.from the operation. The identities of suspects, The identities of suspects,
if any.if any.
Operatives under yourOperatives under yourcare, custody, or controlcare, custody, or control
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COVERT OPERATIONCOVERT OPERATION There are two major forms of covert operations: There are two major forms of covert operations:
undercover operations undercover operations surveillance operations surveillance operations
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UNDERCOVER OPERATIONUNDERCOVER OPERATION Undercover operations seek to develop evidence directlyUndercover operations seek to develop evidence directly
from people involved in the offense through the use offrom people involved in the offense through the use of
disguise and deceit.disguise and deceit.
Rather than waiting for the information to come by otherRather than waiting for the information to come by other
routes, there is a conscious decision to seek it out.routes, there is a conscious decision to seek it out.
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SURVEILLANCESURVEILLANCESurveillanceSurveillance isis the planned observation of people,the planned observation of people,
places, or objects. Itplaces, or objects. It isis normally concerned with people.normally concerned with people.
Places and objects observed usually are incidental toPlaces and objects observed usually are incidental tothe primary interest of gathering information aboutthe primary interest of gathering information about
certain people.certain people.
There are two general types of surveillance:
mobile and fixed.
MOBILE AND FIXED
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SURVEILLANCE Mobile surveillance can beMobile surveillance can be
done on foot or by vehicledone on foot or by vehicle
and is carried out whenand is carried out whenpeople being observedpeople being observed
move from location tomove from location to
location.location.
A fixed surveillance is used A fixed surveillance is used
when a person or activity when a person or activity
remains in place, althoughremains in place, althoughthe observers might movethe observers might move
from one vantage point tofrom one vantage point to
another in the immediateanother in the immediate
area.area.
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ENTRAPMENTENTRAPMENTEntrapment poses the biggest legal problem in covertEntrapment poses the biggest legal problem in covertoperations, particularly in undercover operations. It isoperations, particularly in undercover operations. It is
imperative that the operation be properly predicated.imperative that the operation be properly predicated.
Again, covert operations Again, covert operations
must not be used for “fishing expeditions”must not be used for “fishing expeditions”
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I N T E R V I E WI N T E R V I E W
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WHAT IS INTERVIEW WHAT IS INTERVIEW An An interview is ainterview is a questionquestion--andand--answeranswer sessionsession
designed to elicit information.designed to elicit information. It differs from an ordinary conversationIt differs from an ordinary conversation
(Inquiry), in that the interview(Inquiry), in that the interview isis structured,structured,
not freenot free--form, andform, and isis designed for a purpose.designed for a purpose.
An interview might consist of only one An interview might consist of only one
question orquestion or aa series of questions.series of questions.
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MASTERING INTERVIEWMASTERING INTERVIEWBe prepare before embarking the interview.Be prepare before embarking the interview.
review the case file learn what informationis known to the witness
hypothesis should be reviewed
to make sure it reflects
the obtained evidences
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MASTERING INTERVIEWMASTERING INTERVIEW Never interview someone without sufficientNever interview someone without sufficient
information and relevance evidences.information and relevance evidences. The most vulnerable witness should be
interviewed after the more reluctant witnesses
CHARACTERISTICS OF ACHARACTERISTICS OF A
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GOOD INTERVIEWGOOD INTERVIEW sufficient length andsufficient length and
depth to uncoverdepth to uncover
relevant facts.relevant facts. includes all pertinentincludes all pertinent
information andinformation andexcludes irrelevantexcludes irrelevant
information.information. conducted as closelyconducted as closely
as possible to theas possible to the
event in question.event in question.
objectiveobjective in scope,in scope,gathering informationgathering informationin a fair and impartialin a fair and impartial
mannermanner
CHARACTERISTICS OF ACHARACTERISTICS OF A
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GOOD INTERVIEWERGOOD INTERVIEWER ““ people persons,” and are people persons,” and are
talented at humantalented at humaninteraction.interaction.
does not interrupt thedoes not interrupt therespondent withrespondent withunnecessary questionsunnecessary questions
phrasing questions in a phrasing questions in a
nonaccusatory manner.nonaccusatory manner. approaching the interviewapproaching the interview
in an informal and low in an informal and low --keykeyfashionfashion..
involves a state of mind andinvolves a state of mind and
a commitment toa commitment toexcellenceexcellence ..
be on time, bebe on time, be professionally attired, and professionally attired, andbe fair in all dealingsbe fair in all dealings
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TERIMA KASIHTERIMA KASIH
FINANCIAL AUDITOR LOOK ATFINANCIAL AUDITOR LOOK AT
THE FIGURES THE FIGURES
INVESTIGATIVE AUDITOR LOOKINVESTIGATIVE AUDITOR LOOK
BEHIND THE FIGURESBEHIND THE FIGURES