4-2 Activity: Red Flag Indicators

ACC 691 Module Four Activity Guidelines and Rubric

Scenario

You are a senior auditor for Counting the Numbers, a mid-level CPA firm. You noticed that some newer staff lack strong fraud prevention skills. The managing partner of your office has asked you to write a memo to the new staff identifying proper fraud prevention procedures. The managing partner mentioned to you that the newer staff may not have a good grasp of how internal controls can be helpful in detecting and preventing fraud risks, how those risks can lead to actual fraud, or what a typical red flag might be, so you must address those topics in your memo.

The skills practiced in this assignment will help to support your work in Project Two.

Directions

Write a memo that describes the connection between internal controls and red flag indicators of fraud.

Specifically, you must address the following rubric criteria:

Describe how weak internal controls can lead to fraud occurring in an organization.

Explain common red flag indicators to be aware of during a fraud risk assessment in an organization.

Summarize how to use data analysis to identify common red flag indicators.