Paper 1

INTRODUCTION TO FORENSIC ACCOUNTING AND AUDIT

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to relate financial and forensic accounting and audit and apply both in fraud investigations.

On completion, a candidate should be able to

Demonstrate the Accounting Cycle beginning with the books of original entry to the final accounts
Identify the difference between Audit, Forensic and Traditional Accounting
Explore the historical development of Forensic Accounting and Audit
Apply Ratio Analysis in fraud detection
Demonstrate understanding of the Forensic Audit Cycle

Content

1
Introduction to Accounting
1. 1.1
  Definition of Accounting
2. 1.2
  Objectives of accounting and users of accounting information
3. 1.3
  Accounting Equation
4. 1.4
  Accounting Concepts and Conventions including the Accrual and Cash Basis Accounting
5. 1.5
  The Accounting Cycle, source documents and Basic books of Accounts maintained by organisations
6. 1.6
  Responsibilities of various stakeholders in regard to Accounting in organisations
7. 1.7
  Regulatory bodies in accounting; professional institutes, government regulatory bodies and others
2
The Accounting Environment and Regulation
1. 2.1
  Key components of the Internal Control Environment in regard to accounting
2. 2.2
  Basic understanding of Financial Reporting Standards applied in Public Sector and Commercial Entities (IPSAS and IFRS)
3. 2.3
  Understand the roles of various entities in regulation of the Accounting Profession
3
Financial Statement and Financial Statement Fraud
1. 3.1
  Process of preparing financial statements
2. 3.2
  Financial statements for sole proprietors, partnerships, companies, NGOs
3. 3.3
  Financial statement/reporting fraud schemes
4
Basic Financial Statements
1. 4.1
  Balance sheet
2. 4.2
  Profit/loss account
3. 4.3
  Statement of cash flow
4. 4.4
  Statement of owner’s equity
5. 4.5
  Financial ratios
5
Forensic Accounting
1. 5.1
  Definition and purpose of Forensic Accounting
2. 5.2
  Forensic Accounting versus traditional accounting
3. 5.3
  Forensic Audit versus traditional Audit
4. 5.4
  Historical development of Forensic Accounting
5. 5.5
  Types of Non-fraud forensic accounting
6. 5.6
  Forensic Accounting Data Analytics tools and Benford’s Law
7. 5.7
  Key skills required for Forensic Accounting
8. 5.8
  Code of Ethics and Regulation of Forensic Accountants
9. 5.9
  Qualities/attributes of Forensic Accountants
6
Forensic Audit
1. 6.1
  Definition and purpose
2. 6.2
  Relationship between forensic accounting, forensic audit financial audit and fraud investigation
3. 6.3
  Key skills required for Forensic Auditing
4. 6.4
  Code of ethics and standards for forensic auditors/forensic investigators
5. 6.5
  Qualities/attributes of Forensic Auditors