Materi Webinar 930

Day 1
Investigative Auditing
and Forensic Accounting
Doddy Ashraf Zulma, Director of Forensic Services

PT Deloitte Advis Indonesia
1
Contents
Overview 3
Case Study 13
Investigation Skill 26
Investigation Management 44
Books and Records 55
Business Intelligence 58
Interview 61
Digital Forensic 64
Red Flags 66
2
Overview
3
Forensic Investigator and Auditor
What is Forensic Accounting
“Simply put, forensic accounting is legally accurate

accounting. That is, accounting that is sustainable in
some adversarial legal proceeding, or within some
judicial or administrative review”
D. Larry Crumbley
Journal of Forensic Accounting
4
Forensic Investigator and Auditor (5/2)
The difference between
Objectives:
• Auditing is a thorough and systematic examination, by independent party, over a financial statements
prepared by management along with books and records and its supporting documents with the purpose
of giving an opinion on the fairness of the financial statements based on accounting standard.
• Forensic investigation is a research, inquiry, investigation, examination, data evidence and information
collection to present a fact based on findings and conclusions on chronological order.
Qualification:
• Auditor mostly have education background from accounting / finance. Certification, CA, CPA, and CPMA.
• Fraud investigator have a varied education and profession background, i.e. accounting, finance, computer
science, engineering, law, criminology, psychology, tax, and others. Certification, CFE, CISA, CIA, CPA,
CA, etc.
5
Forensic Investigator and Auditor (6/2)
The difference between
Time and scope of work:

• Auditing is a regular, periodic and recurring process by focusing on general examination on financial data
and/or information, mostly a non-adversarial engagement.
• Forensic investigation is conducted only when there is an indication of fraud, and a non-recurring
process. Its scope of examination is specific and based on accusation and/or allegation, mostly an
adversarial engagement.
Methodology and presumption:

• Methodology used in auditing mainly is financial data examination to ensure the financial records are in
accordance with accounting standard. Auditor also needs to have a professional skepticism.
• Forensic investigation used a fraud examination techniques, i.e. documents review, interview, computer
forensic, etc. Its objective is to collect evidence to prove of guilty or innocence of a fraud allegation.
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Forensic Investigator and Auditor
The difference between - Summary
 To audit the financial  To dig out the fraud (4W +

Purpose
statement 1H)
Documentary  “Professional skepticism”  “heightened degree of

evidence skepticism”
Other evidence
 Sampling, data analysis  Interview (or interrogation),
gathering and observation forensic computer, employee
desk review
Scope and  Materiality matters,  Materiality doesn’t apply,
materiality control-risk based higher level of scrutiny in
suspected area
 Routine, doesn’t
Urgency interfere company’s  Extremely urgent, top priority
operation
7
Forensic Investigation
The profession
Essential Characteristics:
• Analytical • Confident
• Detail-oriented • Makes people at ease
• Ethical • Team player
• Responsive • Adaptive
• Insightful • FUN PERSONALITY
• Inquisitive / curious
• Intuitive
• Persistent
• Scepticism
• Evaluative
• Function well under pressure
8
When to use Forensic Accounting Investigator
 Consider the role of a patrolman and a detective

 A predication, the totality of circumstances that would lead a reasonable, professionally trained and
prudent individual to believe a fraud has occurred, is occurring or will occur, must exist before an
investigation undertaken
 Triggering point of fraud may include:
• Anonymous allegation
• Misleading information provided to the auditor
• Indication of improper accounting treatment
• Indication of fictitious vendor
• Investigation by law enforcement agency
9
Types of fraud
Fraud
Internal/Occupational External
(employees, owners) (customers, vendors, other
parties)
• Demand bribes from employees
• Submission of falsified account information
for payment
• Hacking
• Theft of proprietary information
• Tax, bankruptcy, insurance, or loan fraud
Financial
Asset
Corruption Statement
Misappropriation
Fraud
Conflicts
Other Improper
of Cash Inventory Overstatement
Bribery assets accounting
interest
Source: Association of Certified Fraud Examiners (“ACFE”)
10
Most common fraud schemes by industry
Cash Cash on Check and Expense Financial Register

INDUSTRY Cases Billing larceny hand payment Corruption reimburse- statement Noncash Payroll disburse- Skimming
tampering ments fraud ments
Bank and financial

services 364 8% 10% 18% 9% 40% 8% 10% 10% 2% 2% 10%
Government and public
administration 189 18% 5% 9% 4% 48% 17% 4% 17% 17% 0% 7%
Manufacturing 177 23% 5% 6% 8% 50% 20% 18% 23% 10% 2% 8%
Healthcare 145 33% 10% 10% 14% 40% 22% 14% 24% 15% 6% 10%
Energy 89 24% 6% 7% 6% 66% 11% 9% 25% 6% 1% 9%
Retail 89 22% 15% 15% 11% 37% 17% 6% 20% 11% 7% 15%
Insurance 82 24% 2% 5% 9% 43% 16% 11% 9% 5% 2% 6%
Education 82 30% 9% 13% 18% 30% 22% 7% 17% 13% 1% 22%
Construction 77 22% 13% 12% 17% 47% 9% 25% 13% 13% 4% 13%
Transportation and
warehousing 64 13% 5% 9% 5% 52% 9% 3% 23% 6% 0% 19%
Technology 63 24% 0% 5% 6% 46% 13% 13% 22% 11% 0% 0%
Telecommunications 62 5% 2% 3% 2% 56% 5% 6% 31% 2% 0% 5%

Food service and
hospitality 59 22% 20% 10% 12% 39% 8% 8% 25% 12% 10% 14%
Services (Professional) 54 37% 0% 9% 20% 26% 24% 15% 11% 22% 2% 11%
Real estate 52 25% 13% 12% 21% 48% 17% 15% 12% 8% 4% 27%
Low Risk High Risk
Source: 2020 ACFE Report to the Nations
11
Fraud Triangle: Explaining new vulnerabilities
Pressure Opportunity
• To meet key financial • Reduction in
target or to keep employees leading to
afloat lack of segregation of
• Financial distress due duties and supervisory
to potential job roles
losses • Delayed audits
• Difficulty to monitor
controls and processes
Rationalisation with remote working
• Management
distractions
Rationalisation
• “I need to keep my bonuses”
• “My needs are greater than yours”
• “I’m only borrowing the money”
12
Case Study
13
Case study: Inflated revenue
Background
• Chinese chain successfully listed in U.S. in 2019
• Internal investigation had shown its Chief Operating Officer and other
employees fabricated sales deals
Fraud Scheme
• Financial statement fraud

• Window dressing the financial statements to achieve a successful IPO
• Inflating sales and building the stock value on Nasdaq before selling off
their stock at high prices
Learning
• “Luckin Coffee debacle is a painful reminder of fraud risk” - CNBC
14
Case study: Accounting deception
Background
• Company struggled at end of tech boom to maintain the appearance of
ever-growing profitability
• At the time, largest ever U.S. bankruptcy
Fraud Scheme
• Cookie jar - certain “line cost” accruals were kept as rainy day funds
• Booking "line costs" as capital expenditure on the balance sheet
instead of expenses
• “Corporate Unallocated” revenue accounts - management-controlled
and posted after quarter close in large, round-dollar amounts
Learning
• When things seem too good to be true, they just might be
15
Case study: Off-the-books accounting
Background
• Its former CEOs and CFO were convicted for
conspiracy and fraud
• Andersen signed off on the corporate reports for
years despite Enron’s poor accounting practices
Fraud Scheme
• Used off-balance-sheet Specialised Purpose

Vehicles (“SPVs”) or Special Purposes Entities
(“SPEs”) to hide its debts and toxic assets from
investors and creditors
Learning
• Growth does not always equate to profit or success

• Excessive focus on share performance
• Dominant CEO, Cosy Board and Exco relationship
• One of reasons for Sarbanes-Oxley Act
16
Indonesia fraud cases (1/2)
• One of the biggest private banks convicted with
embezzlement scandal in 2011 conducted by the former
Citibank Executive Manager, Inong Malinda Dee.
• The fraud was worth in total IDR 17 billion from
approximate 117 transactions
• Malinda landed 8 years in prison, and ordered to pay a fine
of USD 1.1 million
• Bank Negara Indonesia allegedly fraudulent Letters of

Credit (L/C) worth IDR 1.7 trillion between December 2002
BNI and July 2003 while granted export credits to the
Gramarindo Group’s subsidiaries using L/C issued by banks
in Kenya, Switzerland and the Cook Island as collateral
• The money was disbursed through 105 transactions
without formal assessments or checks. The L/C were
fictitious, as goods were never imported.
• In 2004, Adrian Waworuntu (Owner of Gramarindo Group)
and Titik Pristiwanti have been charged with one count of
wire fraud, which carries a maximum prison sentence of 15
years while the other suspect, Maria Pauline Lumowa
cannot be extradited due to citizenship issue 17
Indonesia fraud cases (2/2)
• One of the biggest state-owned enterprise pharmacy

company inflated its profits by USD 32.6 billion in 2001
Kimia Farma
• The auditor from Hans Tuanakotta & Mustofa (HTM)
failed to detect the overstated income and was
obligated to pay IDR 100 million to the state
• Kimia Farma itself was obligated to pay IDR 500 million
to the state while the former Director proven guilty and
ordered to pay a fine of IDR 1 billion to the state
• In 1997, Bank Bali has difficulties to collected its

receivables amounting to IDR 3 trillion which saved in
Bank Bali Bank Dagang Nasional Indonesia (BDNI), Bank Umum
Nasional (BUN), and Bank Tiara.
• After using PT Era Giat Prima as its collector, Bank
Indonesia and BPPN agreed to pay Bank Bali totaling to
IDR 905 billion but the fund was distributed to
unrelated parties
• In 2000, the case ended with Syahril Sabirin declared
as the only convicted person 18
Case Study
Project Alchemist
Background
• The company was a subsidiary of multinational manufacturing company in Indonesia. Its business is
mainly manufacturing and trading synthetic resin and organic chemicals. The suspect was “AA”, a Head of
Collections.
• Consultant was engaged to conduct an independent investigation in relation to alleged fraud conducted
by AA in Target during period 2008 to 2011.
How was the fraud discovered?

• The fraud was discovered by one of the company’s collector, who found out about the outstanding
receivable of one of the customer which has been settled by a cheque collected by him. He then checked
with the customer and obtained information that the cheque was deposited into the “illegal bank
account” under Target’s name.
• The “illegal bank account” was later closed, one day after AA submitted his resignation.
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Case Study
Project Alchemist
How was the fraud perpetrated?

• There was a bank account opened under Company’s name. The account was opened by AA on 12 August
2008 by using falsified signature of Company’s President Director.
• The opening of account process was done with the assistance of AA’s wife. She worked in a bank as an
account officer during that period.
• During 2008 to 2011, AA had committed alleged fraud by depositing selective customers’ cheques into
the account and then he made withdrawals subsequently for his personal use. In his operation, he was
also assisted by his family and friends.
• Total sales payment deposited to “illegal bank account” was amounting to IDR 17.45 billion.
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Case Study
Project Alchemist
Procedure conducted
• Reconciliation between bank statement (company’s official bank account, illegal bank account) with
customer sales payment received (direct confirmation)
• Review company’s internal policy and interview all related personnel in the company to identify gap
between policy and actual practice
• Digital forensic on AA’s computer to identify all related documents and people involved
• Perform background search on AA and his relatives to identify his association and his other activities after
work
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Case Study
Project Alchemist
What has caused this situation

• Internal control weaknesses in collection process, the Company was still using manual documentation for
collection
• Management and internal audit failure to detect the frauds

• Lack of attention to detail and the exercise of very minimal supervision over the collections function, as
well as failure to initiate appropriate inquiry into long overdue receivables.
• The poor security control of company director identity documents (president director’s personal
documents were copied and used as supporting documents for “illegal bank account” opening)
• The fact that suspect’s wife worked for the bank with lack of internal control
• The apparent collusion of his wife in opening a false account to enable suspect to deposit funds
misappropriated from Target and its customers.
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Fraud risk factors
Fraudulent financial reporting Misappropriation of assets
• High degree of competition or market • Known or anticipated future employee

saturation, accompanied by declining layoffs
Pressure
margins
• Recent or anticipated changes to
• Marginal ability to meet exchange listing employee compensation or benefit plans
requirements or debt repayment or other
• Promotions, compensation, or other
debt covenant requirements
rewards inconsistent with expectations
• Significant financial interests in the entity
• High turnover rates • Easily convertible assets

• Difficulty in determining the organization • Inadequate segregation of duties or
independent checks
Opportuni
or individuals that have controlling interest

in the entity • Inadequate access controls over
• Domination of management by a single automated records, including controls over
t y
person or small group and review of computer systems event

logs
• Low morale among senior management • Disregard for the need for monitoring or
Rationalisation
• The owner-manager makes no distinction reducing risks related to misappropriations

between personal and business of assets
transactions • Changes in behaviour or lifestyle that may
• Dispute between shareholders in a closely indicate assets have been misappropriated
held entity • Tolerance of petty theft
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Examples of circumstances that indicate the possibility of fraud
(24/2)
Discrepancies in the accounting records Conflicting or missing evidence

• Transactions that are not recorded in a • Missing documents
complete or timely manner or are improperly • Documents that appear to have been altered
recorded
• Unavailability of other than photocopied or
• Unsupported or unauthorized balances or electronically transmitted documents when
transactions documents in original form are expected to
• Last-minute adjustments that significantly exist
affect financial results
• Significant unexplained items on reconciliations
• Tips or complaints to the auditor about alleged
• Unusual balance sheet changes
fraud
• Subsidiaries audited by a lesser-known firm
Unusual relationships between the auditor

Financial statements
and management
• Denial of access to audit evidence • Related party transactions that are material
• Undue time pressures imposed by management • Uncommon complicated transactions and
to resolve complex or contentious issues accounting methods
• Complaints by management about the conduct • Sudden change in accounting policies or that
of the audit or management intimidation of appear to be at variance with industry norms
engagement team members
• Unusual delays by the entity in providing
requested information
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Examples of circumstances that indicate the possibility of fraud
(25/2)
Contrarian trends Procurement and payments

• Increase in cash transactions despite closure of • Higher-price, lower-quality goods
physical premises due to COVID-19 • Excessive gifts and entertaining of procurement
• No change in revenue despite industry being staff by suppliers
affected by COVID-19
• Procurement staff demanding extended periods
• High revenue vs low cash inflow of notice before they allow an audit to take
place
Investment Other
• High transaction value and may have a • Unwillingness by management to permit the
complicated structure, unknown sellers or an auditor to meet privately with those charged
overseas investment with governance
• Accelerated acquisition timeline • Frequent changes in accounting estimates that
• Use of multiple advisors and high consultant do not appear to result from changed
fees circumstances
• Tolerance of violations of the entity’s code of
conduct
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Investigation Skill
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Investigation Skill
Introduction
Every investigator responsible for conducting investigations on behalf of their employer has a responsibility
to ensure they have the:
• appropriate skills
• training, and
• commitment to effectively and efficiently conduct an investigation
of a complaint or allegation of a breach of law or company policies.
Not every individual charged with investigations responsibility can necessarily merely undertake formal
training and quickly become an accomplished investigator. Primarily this is because Investigations Skill is
an:
Art and not a science. The principles of being a good investigator can be taught the same as the
principles of painting can be taught, but not every body can become a master of painting.
It takes both training and built up experience implementing the learned techniques and a lot of
patience.
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Investigation Skill
Principle of Investigation
Basic Principle
“An investigation is a search for the truth in the interests of justice and in accordance with the
law”.
• An objective assessment of an act, omission, situation or event to determine any breach.
• Evidence obtained lawfully.

It is a systematic examination of acts, omissions or events to determine, assess and report on matters
related to commission of a crime or other disciplinary matters.
The objectives to be met in achieving that aim are to identify and confirm about each allegation is the
following:
• Who, • When,
• What, • How, and

• Where,
• Why.
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Investigation Skill
Basic Principle
A search for the truth should be undertaken in accordance with the fundamental principle of
natural justice, i.e.
• a person directly affected by an investigation and its outcome should be given a fair hearing prior to a
decision being made,
• the decision maker should be impartial and objective.
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Investigation Skill
Basic Principle
Investigation is to determine that a fraud or breach of other laws or policy has been committed.
But remember that:
• Every investigation is different and every investigator has their own methodology to achieve the results
they want.
• Investigators use science to help them solve crimes and other problems.
• Investigators should continuously keep abreast of new developments in investigation methods and
forensic science.
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Investigation Skill
Role of Investigator
The role of the Investigator
• Responsible for the investigation.

• Objective approach.
• Concern with proof of innocence (exculpation) and not only conviction of the guilty.
• Objective collector of fact.
• Protect interests of organisation in relation to revenues, security and reputation.
• Will be held accountable for actions and decisions.
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Investigation Skill
The role of the investigator: Exhaust all avenues of inquiry

In carrying out the role of investigator, he or she must consider carefully all potential sources of
information and evidence and make full and proper inquiries. Sources to be considered must
include:
• All victims
• All witnesses
• Interviewing all suspects
• Inspecting and searching all scenes (which includes scenes of crime, the victim, suspects and their
premises)
• Digital or CCTV recordings
• Telephone, banking and credit card records
• Intelligence databases
• Experts.
32
Investigation Skill
* College of Policing (2013) : Investigation process. https://www.app.college.police.uk/app-

content/investigations/investigation-process
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Investigation Skill
The role of the investigator (continued):
Main Responsibilities:
• Determine fraud committed
• Identify the offender
• Locate the offender
• Provide evidence of guilt.
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Investigation Skill
The investigator must ensure without fail that they :

• are objective and impartial
• compile the evidence to establish the facts of what occurred
• establish and document the facts
• report all findings
It is not generally the investigator’s role to draw conclusions as to whether alleged misconduct or serious
misconduct occurred. In a corporate environment this will usually be the role of Human Resources or
Legal Departments advising management.
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Investigation Skill
In fulfilling their role, the investigator will:

• Identify the issues to be investigated
• These may be contained in the original allegation
• They may come to the attention of the investigator during the course of the investigation
• Interview any complainant and/or witnesses
• Obtain signed statements from key witnesses.
36
Investigation Skill
In fulfilling their role, the investigator will:

• Ensure the subject/suspect of the complaint is not necessarily immediately informed of the content of
allegation - not all the issues will be fully identified initially.
• Collect and record and store documentary evidence such as files, computer files, memos, letters, e-
mails, photographs, etc.
• Interview the suspect and document their response/ obtain a statement from them.
• Prepare a report containing the findings for management.
37
Investigation Skill
Conflicts of interest
• All investigations must be conducted without bias or prejudgment.
•No one with an actual or perceived conflict of interest should be appointed or remain as the investigator. A
conflict may occur where the investigator has:
• Close personal association with the complainant, subject of the allegation.

• The investigator has an actual or perceived interest in the outcome of the investigation.
Maintaining confidentiality
• Investigators must maintain confidentiality and impress upon all witnesses to keep details of the
investigation confidential.
• Information gathered should only be divulged to others on a ‘need to know’ basis.
38
Investigation Skill
Timeframes
• Proper investigation require a combination of thoroughness and timeliness.
• Timeframes should not be too strict or it may compromise thoroughness, however issues of fairness to
all involved dictate an investigation should be conducted as expeditiously as possible.
• Investigation performed hastily may overlook relevant facts and information important in deciding
whether allegations are likely to be true and key to proving those allegations before management or a
court.
• If an investigation is allowed to become extended, evidence may become less reliable as people move,
and memories fade.
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Investigation Skill
Detail required:
• Level of detail an investigation report contains may vary on each case circumstances.
• While investigations proceeds responsibility exists to ensure that all relevant evidentiary material that
will assist management in its decision making is brought to their attention.
• During investigations, note taking is very important, the investigator should:
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Investigation Skill
Investigation decisions
• All witnesses, or others able to assist should be interviewed where able to help establish the facts should
be asked to provide written statements.
• Suspects, ideally should be interviewed last, after the investigator has collected all the available
evidence as possible from other sources. This minimises the risk of evidence being tampered with or
witnesses being intimidated.
• In some cases issues of fairness may require that the subject to be informed that an investigation is
being conducted, general nature of that investigation.
• It may be also be necessary to inform of the general substance of the allegations prior to interview
41
Questions auditors need to consider
1. Will fraud cause material misstatements in the financial statements?
2. Are there any indications of the presence of fraud risk factor(s) from other
risk assessment procedures and related activities performed?
3. Are there any events or conditions identified that indicate an incentive or

pressure to commit fraud or provide an opportunity to commit fraud?
4. How do the size, complexity and ownership characteristics of the entity

affect the assessment of the fraud risk factors?
5. In determining overall responses to address the assessed risks of material

misstatements due to fraud, how can the overall conduct of the audit reflect
increased professional scepticism?
6. In the presence of fraud risk factor(s), should the nature, timing and extent
of audit procedures be changed?
7. Do the analytical procedures that are performed near the end of the audit
indicate a previously unrecognised risk of material misstatement due to
fraud?
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Examples of possible audit procedures in
addressing fraud risks
1. Revenue recognition:
• Comparing revenue reported by month and by product line or business segment during the
current reporting period with comparable prior periods
• Confirming with customers certain relevant contract terms and the absence of side agreements
2. Inventory quantities:
• Examining the entity’s inventory records to identify locations or items that require specific
attention during or after the physical inventory count
• Observing inventory counts at certain locations on an unannounced basis or conducting
inventory counts at all locations on the same date
3. Management estimates:
• Using an expert to develop an independent estimate for comparison to management’s estimate
4. Misstatement due to misappropriation of assets:

• Counting cash or securities at or near year-end
• Analysing inventory shortages by location or product type
• Analysing recoveries of written-off accounts
• Reviewing the propriety of large and unusual expenses
5. Journal entry testing:

• Reviewing manual journal entries
• Identifying unusual journal entries pairings
• Identifying anomalies in journal entry patterns, especially around cut-off
43
Investigation
Management – “Getting
it right the first time”
44
Investigation Management
Introduction
Every investigation requires an understanding of the basic principles including understanding of the
fundamental principle of management and planning. A SMEAC acronym is used in military and police
operations and investigations and ensures careful planning and a methodical approach.
Every investigator should be fully aware of the five elements of SMEAC and apply these to each matter:
• Situation (the allegations or concerns)

• Mission (what needs to be established as a “prima facie” case, & how to)
• Execution (the investigation plan)

• Administration
• Communication
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Introduction
Initiating the investigation

The moment an allegation is made or received a number of key matters must be considered
immediately.
• assess the complaint or allegation

• first task is to determine the nature of the complaint (does it require an investigation or is it able to be
resolved in another manner)
• information relating to improper conduct must be assessed to ensure it is genuine
• if genuine, what breach of policy or law is likely to have occurred
• decision can then be made whether to investigate
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Initial Action
The initial action taken at the commencement of an investigation may be crucial to a successful
outcome. Key steps need to be taken by investigators to:
• Obtain and preserve known or existing documentary or other physical evidence

• Secure and preserve potential sources of electronic evidence (laptops, desktops, servers, electronic
registers, mobile phones, PDA/tablets etc.)
• Protect witnesses (particularly whistle blowers)
• Interview whistleblowers (where not anonymous) or those making initial complaint – obtain all the
information they have at initial interview, remember they may change their mind on
cooperation
• Identify other potential witnesses and sources of evidence (secure and preserve where necessary)
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Investigation Plan
A proper and appropriate investigative plan is required, that outlines:

• Notification of stakeholders
• Evidence collection, and
• Analysis
• Compliance with laws
It is an outline of how the investigator intends to carry out the investigation to obtain the relevant facts
necessary to enable management to make appropriate decisions.
It is a checklist to ensure all the necessary points are covered efficiently.

Is should be updated continually to document steps completed, and to reflect changes to the plan based on
steps taken and information and evidence obtained
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Investigation Plan
The Plan
Items in a good investigative plan include:
1. contact list
2. notification list (who, when and why?) – “Need to Know” principle applies
3. background information
4. allegations list
5. outline of proof required, including legal elements of proof and evidence required for each allegation
6. list of witnesses and documents for each allegation
7. interview sequence plan
8. a chronology of events
9. Logistics required e.g. specialists document examiners, computer forensics etc
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Investigation Plan
The Plan (continued)

Information Management and Analysis must be considered. A quality system for information
collection, storage and retrieval is an essential feature of the investigations and analysis process as:
• information collected will have meaning, both on its own, and when considered in light of all information
available at any particular time
• it is also important to evaluate information as it comes to hand
• and when conflicting information is received to be able to continuously assess information, investigators
must be able to store it and retrieve it easily and quickly
• sound control mechanisms are invaluable in helping to prove the “Chain of Custody” of evidence
gathered
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Investigation Plan
Investigation NOT TO DO LIST
DON’T DON’T
focus the inquiry narrowly create multiple versions of interview notes
wait to preserve EVIDENCE until after you limit message too narrowly
conduct interviews
Don’t use INFLAMMATORY OR BIASED labels like draw conclusions clearly unsupported by the facts
“SUSPICIOUS DOCUMENT”; use neutral labels
intimidate witnesses allow remedial actions to be forgotten ( monitor

progress)
prematurely make interim conclusions appear to be partial when dealing with a
whistleblower
rely exclusively on labels in the electronic disclose results of an investigation without
document review tool(s)s segregate key obtaining the appropriate advice
documents and evaluate independently
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Investigation Plan
Summary Process
College of Policing (2013) : Investigation process.

https://www.app.college.police.uk/app-content/investigations/investigation-process
52
Investigations Overview
Typical methodology
Interviews Books and Records

Interviews are fundamental to understand When considering books and records, we aim
the allegation and the relevant business Interviews to examine original documentation relevant
operations. The typical people we would to the transactions of interest. The following
talk to include: is a typical sequence of the review:
₋ Selected management team and ₋ Obtain an overview of the business
relevant business process owners operation and derive the group
₋ Other relevant staff for the matter
Deloitte structure
Discovery
₋ Obtain relevant financial data of the
business such as general ledger,
Discovery & Computer Forensics contracts, bank statements
Books and
Electronic data and correspondence is key Records ₋ Sample testing to identify irregularities
to verifying or refuting allegations. We
will
₋ Preserve hard drives of personnel Data Analytics
allegedly involved in wrongdoings It’s essential to use data analysis for an
₋ Conduct forensic procedures such Business efficient approach to identify key risks,
as recovering data from deleted Intelligence fraudulent activities, errors or misuses, and
files to verify the process and to influence
business decisions.
₋ Conduct key word searches in
emails and documents utilising Data Analytics
₋ Analyse entries population (tens of
advanced eDiscovery platforms millions of transactions)
₋ Aggregate and identify hidden insights
in disparate sets of data (Kingdee,
Business Intelligence Ufida, SAP, etc.)
Related parties are often identified in ₋ Customize procedures to JV areas of
fraud and misconduct schemes.
intent (bribery, fraud, misstatement,
₋ Perform background research and etc.)
checks and/or directorship search
on companies and or individuals
₋ Visualize the outliers and narrow down
pertinent to this enquiry. the focused selection for follow up
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Investigations Overview
Act Quickly and Confidently
Report
Findings
Conduct • Synthesise
Interviews information
collected &
Review • Develop analysed into
strategy observations &
Documents
findings
• Craft interview
• Read & analyse
Analyse questions • Develop
documents recommendations
Data • Prepare
• Identify relevant reference
• Execute analytics • Report results to
internal control documents
Collect Data on transactional client, lawyers or
weaknesses
data & regulators as
• Conduct appropriate
• Identify relevant documents • Map out key interviews &
Scope parties (keyword relevant business take notes
searches) processes
• Gather system • Determine any
• Understand information • Anomaly testing • Adjust keyword further work
allegations search terms
• Collect, image, • Review & required
based on reviews
• Develop work load, prep & host interpret
plan data from analytical output
devices & • Quality control
systems
• Convert into
• Gather hardcopy
tables, graphs &
data
visualisations
• Organise &
catalogue data
54
Books and Records /
Financial Review
55
Books and Records Review
Objectives
• Understanding entities’ financial condition

• Understanding entities’ business operation
• Identify irregular, unusual, significant accounts during certain period, i.e. fundamental financial analysis
(profitability, operational, debt analysis, etc.)
• Identify unusual transactions

• Obtain supporting documents to be used as evidence (preserving evidence)
• Understanding the allegation based on chronological order
• Identify key persons involved in relation with the allegation (preparer, reviewer, approver, etc.)
56
Books and Records Review
Procedures
• Fundamental financial analysis

• Horizontal and vertical analysis
• Ledger review
• Standard Operating Procedures review (procedures, authorised persons, documentation, etc.) and
identify breach of the procedures
• Documents testing review (sampling or full population review)

• Conduct actual physical count on inventory / assets (stock count)
• Identify chronology of the event/ fraud/ allegation
• Remember to FOLLOW THE MONEY
57
Business Intelligence
58
Business Intelligence / Background Checks
Objectives
• Personal background information / relationship

• Company profile, i.e. main business operation, location, products, etc.
• Key profiles, i.e. Board of Directors, Board of Commissioners, shareholders, subsidiaries, associated
personnel and/or entities.
• Personal and/or entities’ political relationship with public functions and/or government
• Dispute and litigation involving key personnel and/or entity
• Adverse news
• Anti-Bribery and Corruption (ABC) information
• Market reputation (suppliers, customers, and regulator)
• Other relevant information
59
Business Intelligence / Background Checks
Procedures
• Public records in Indonesia, i.e. PNRI, local government, etc.

• Inquiries of relevant government agencies
• Subscribed database, i.e. Bloomberg, disB2B (Indonesian business database), Deloitte Global Database,
etc.
• Indonesian courts (district court, high court, supreme court) database

• Field inquiries on Target (site visit)
• News media and internet research
• Social media research
• Surveillance (if necessary)
60
Interview
61
Interview
Preparation
Goal Setting
Rapport Building
Successful Interview
Analysis of verbal and non-verbal responses
Conducting the interview
Obtaining admission or confession
62
Interview
Seven Deadly Sins
• Show emotion
• Be impatient with the subject
• Show disrespect, or ridicule the subject
• Make promises you cannot keep
• Place undue emphasis on inconsistencies
• Reveal information
• Jump to conclusions
63
Digital Forensic /
Analytic and Forensic
Technology
64
Definitions ?
Digital Forensics
Forensic (forum - ensis)

suitable for a forum , court of law, public debate, or formal
argumentation
Digital Forensics is the process of uncovering and

interpreting electronic data for use in a court of law.
The goal of the process is to preserve any evidence in

its most original form while performing a structured
investigation by collecting, identifying and validating the
digital information for the purpose of reconstructing past
events.
65
Red Flags
66
Red Flags
Financial Statement Fraud Bribery and/or corruption
• Long overdue AR (difficult to collect, contact, • Large payment to government officials, i.e.
or verify) police, government agency, or PEP
• Unusual rapid growth of profitability (compared • Significant amount of marketing, travel and
with company in same industry, compared with entertainment expenses
prior years)
• Significant irregular payment made close with
• Large sales amount at year end, significant dealing date
sales return at the beginning of year of the • Unusual relationship between company and
following year government officials
• Inconsistent ratios, i.e. increase in sales but
same/or lower COGS,
• Significant AR write off

Money Laundering Asset Misappropriation
• Capitalising non-asset cost to increase asset
Significant amount transferred to individual
• value • Unreconciled inventory list with sales list –
bank account fictitious sales / inventory theft / skimming
• Transfer made to bank account in tax haven • Unreconciled cash / bank statement with sales
country, i.e. British Virgin Island, Cayman payment receipt – cash theft / lapping
Islands, Bahama, Bermuda, etc.
• Employee with no time off, holiday, or sick
• Large cash deposit leave used – ghost employee / skimming /
• Significant purchase made in cash lapping
• Transfers just below threshold made in several • Employee’s lavish lifestyle – cash theft /
transactions lapping / kickback
• Payment made for something not related with

business / operational purpose
67
“Let the world infested by
dishonest people so we can
keep our job”
68
Question and
Answer
6
9
Day 2
“Memahami pentingnya investigative auditing dan
forensic accounting dalam kontribusinya untuk
pembentukan Indonesia Maju paska Covid-19”
EMMAN MARPAUNG M.FCG, CFE, Cert III
EMMAN MARPAUNG
Education and Certification
• Bachelor of Accounting - University of Bengkulu, Indonesia
• Fulbright Scholarship – University of Mississippi, USA
• Master of Financial Crime & Governence – Macquarie University, Australia
• Association of Certified Fraud Examiners (ACFE) – Sydney Chapter
• Cert III – Private Investigator New South Wales,Australia
• Founder Forensic Accounting Tech. application (FATech).
Work Experience
• BDOAustralia in Sydney – Forensic Services
• BDO Indonesia – Forensic Services
• Integrity Indonesia - Forensic Investigation Services
• Ernst & Young Indonesia – Forensic Investigation & Dispute Services
• KPMG Indonesia – Forensic Services
AGENDA HARI 1 - MATERI
• BAGAIMANA COVID-19 MEMPENGARUHI INSIDEN
PENIPUAN (FRAUD)?
• APA PERBEDAAN ANTARA AUDIT, PEMERIKSAAN
PENIPUAN (FRAUD EXAMINATION), DAN AKUNTANSI
FORENSIK?
“MEMAHAMI PENTINGNYA • BAGAIMAN CARA MENGANALISA PENIPUAN LAPORAN

KEUANGAN DENGAN MENGGUNAKAN DATA ANALYSIS
INVESTIGATIVE AUDITING DAN TEKNOLOGI?
• APA CONTOH DARI PENIPUAN LAPORAN KEUANGAN
DAN FORENSIC (FINANCIAL STATEMENT FRAUD), RED-FLAGS, DAN
BAGAIMANA CARA MENDETEKSINYA?
ACCOUNTING DALAM • BAGAIMANA AKUNTAN FORENSIK BISA MEMBANTU

AUDITOR DAN CORPORATE FINANCE DALAM
KONTRIBUSINYA UNTUK MENGURANGI TERJADINYA RESIKO FRAUD?
AGENDA HARI 2 - PRAKTIKAL

PEMBENTUKAN • BAGAIMANA AKUNTANSI FORENSIK MELAKUKAN DATA
INDONESIA MAJU PASKA

ANALYSIS SEDERHANA UNTUK MENDETEKSI RED FLAGS
FRAUD? (MENGGUNAKAN APLIKASI EXCEL)
COVID-19” • BAGAIMANA CARA MEMITIGASI FRAUD DAN BAGAIMANA

INTERNAL CONTROL PERUSAHAAN MENJAGA ASET
PERUSAHAAN?
ADDITIONAL
• BAGAIMANA CARA MELAKUKAN WAWANCARA
INVESTIGATIF DAN MEMBUAT LAPORAN WAWANCARA?
• BAGAIMANA MENGUMPULKAN DAN MENYIMPAN BUKTI
PENIPUAN DAN MEMPERSIAPKAN LAPORAN INSIDEN
PENIPUAN?
“BAGAIMANA COVID-19
MEMPENGARUHI INSIDEN
PENIPUAN (FRAUD)”
“pengadilan Inggris mencatat kasus penipuan senilai
KRISIS
lebih dari £1,1 milyar pada 2008/2009, yang
pada saat itu merupakan jumlah tertinggi kedua dalam
sejarah survei.”
- KPMG UK
KEUANGA
“Selama tahun 2009, tingkat penipuan secara N GLOBAL
keseluruhan meningkat 9 persen.”
- CIFAS - a major UK anti-fraud body (GFC)

2001: UK Foot and Mouth Crisis 2004: Indian Ocean Tsunami 2005: Hurricane Katrina
“Lebih dari $110 miliar

“Lebih bayar dan penyimpangan, “Dugaan penyalahgunaan dana
disisihkan oleh AS untuk
dan mengakibatkan sejumlah bantuan internasional bernilai lebih
rekonstruksi, dan total $1,5
perselisihan.” dari €50 juta.”
miliar kontrak diberikan tanpa
penawaran.”
.
2010: BP Oil Spill at Golf Mexico 2017: Grenfell Fire West London
“Sepasang suami istri merancang “Sekitar £1 juta hilang
skema rumit untuk memindahkan dari para penipu yang
dana dari bisnis yang mereka miliki mencari keuntungan
sehingga tampak seolah-olah dari bantuan yang
mereka telah merugi karena ditujukan untuk para
tumpahan minyak. Mereka korban kebakaran.” .
kemudian menerima $ 2,1 juta

sebagai kompensasi atas kehilangan
pendapatan”.
2001: UK Foot and Mouth Crisis 2004: Indian Ocean Tsunami 2005: Hurricane Katrina
“Lebih bayar dan penyimpangan, “Dugaan penyalahgunaan dana “Lebih dari $ 110 miliar disisihkan oleh AS
“During The
dan menga kibatkan sejumlah
Crisis, The Government T
ried
bantuan internasional bernilai lebih
To Respond T
ountuk
Control n 80%
rekonstruksi, da dari $ 1,5
The Disease And The Companies
per selisihan.” dari €50 juta.”Tried T o Focus On HowmiliarT
odalam kontrakdiberikan tanpa
penawaran.”
Maintain Business Operation”
..
2010: BP Oil Spill 2017: Grenfell Fire

“Sepasang suami istri merancang “Sekitar £1 juta hilang
skema rumit untuk memindahkan dari para penipu yang
dana dari bisnis yang mereka miliki mencari keuntungan
sehingga tampak seolah-olah dari bantuan yang
mereka telah merugi karena ditujukan untuk para
tumpahan minyak. Mereka korban kebakaran.”.
kemudian menerima $ 2,1 juta

sebagai kompensasi atas kehilangan
pendapatan”.
“105Kasus kecurangan terjadi di bulan February -
March 2020 yang mengakibatkan kerugian senilai £1
COVID-19
Juta”.
- National Fraud Intelligence Bureau
“Di bulan April 2020 Interpol mengeluarkan pernyataan

yang menyatakan bahwa mereka menangkap tindak
kecurangan multinasional terkait pengadaan masker
dengan total kerugian £1.3 Juta.
- Interpol
“Potensi fraud yang berhubungan dengan COVID-19

mencapai USD5 juta”
- FBI
FRAUD TRIANGLE
COVID-19
“Presiden Jokowidodo mengucurkan dana
sebesar 405,1 T dengan alokasi: dana
kesehatan sebesar 75T, jaring pengaman
sosial sebesar 110T, pembiayaan
program pemulihan ekonomi nasional
sebesar 150T, dan insentif perpajakan
dan stimulus KUR sebesar 70,1T.”
AUDITING
FRAUD EXAMINATION FINANCIAL
& STATEMENT
FORENSICACCOUNTING FRAUD
APA PERBEDAAN ANTARA AUDIT, PEMERIKSAAN PENIPUAN (FRAUD
EXAMINATION), DAN AKUNTANSI FORENSIK?
INTERNAL & EXTERNAL

AUDITING
• PLANNING FORENSIC ACCOUNTING
•
•
•
RISK ASSESSMENT
INTERNAL CONTROLS
AUDIT EVIDENCE
• • ACCOUNTING
LEGALMATTERS
• REPORTING
FRAUD EXAMINATION
• PREVENTION AND
•• DETERRENCE
INVESTIGATION
REMEDIATION
PAGE 12
Kasus “Invoice Financing Fraud”
1.Jan 2012 PLN hold a tender

for Engineering, Construction,
& Procurement (ECP) project
and the tender won by “PT
ABC”
Project Owner
2.Oct 2012 “PT ABC” 5.March 2013 “BRI
(PLN) required fresh funds, Syariah” issued L/C for
however “BRI Syariah” invoices issued by
can only provide A/P “Altria”. L/C will
and L/C facilities. mature in 8 months.
8. “PT ABC” received AUD
17 million from “GP” and
owed “BRI Syariah” worth “PTABC” (Anak BRI Syariah
USD 18 million. Difference Perusahaan Bank (“BRI
of USD 1 million as fee for
“Altria”. Money of USD 17
BUMN) Syariah”)
million partly used not in 4.March 2013 - “PT
function – Entertainment ABC” Sent a Fake PO to
Fee. “Altria”, then “Altria” 3. March 2013 “PT ABC”
sent Invoice for that collude with “Altria” to
Early in 2016, the directors fake PO. For payment, commit Invoice Financing 7. Nov 2013 –
resigned. Fraud. “BRI Syariah” paid
“PT ABC” used L/C. PO
maturity L/C
Value is USD 18 million
worth USD18
million to “Altria”
through Standard
Altria Capital Standard Chartered Bank di
London.
Pte Ltd Chartered
6. March ‘13 “GP” “Altria” Bank, London
represented
“Altria” (affiliation)
transferred money
to PT ABC’s Global Trading Since the "PTABC" is a
Account worth USD Pte Ltd “GP” Subsidiary of State-Owned
17 million to
complicate tracking
Enterprises, the government
lost millions of dollars
GAMBARAN TINGKAT FRAUD DI ASIA-PACIFIC REGION
329%
2018 2020 PAGE 14

“BAGAIMAN CARA
MENGANALISA
PENIPUAN LAPORAN
KEUANGAN DENGAN
MENGGUNAKAN
DATAANAL
YSIS DAN
TEKNOLOGI?”
PAGE 15
Financial statement analysis
Teknik Perbandingan
Hubungan Financial
• Assets Vs Liabilities.
• Sales Vs COGS.
• Sales VsA/R.
• Sales Vs Inventory.
• Profit Margin
Vertical dan Horizontal Analysis

• VerticalAnalysis
• HorizontalAnalysis
Rasio Operating Cash Flow terhadap Net Income
PAGE 16
FINANCIAL RATIO ANALYSIS
Current Ratio
Quick Ratio
Debt-To-Equity Ratio
Profit Margin Ratio
Receivable Turnover Ratio
Collection Ratio
Inventory Turnover Ratio
Average-Number-of-Days-
Inventory-Is-in-Stock Ratio
PAGE 17
Forensic accounting Tech.
Balance
Sheet
FA.Tech Forensic Accounting

Application and Investigation Skills
Cash Flow
Identify which accounts

that pose high risk of
Financial Statements
Fraud
Example 1 – Garuda Indonesia
Ratio Index ‘DI’ involves Account Receivable,
identified as High Risk.
Ratio Index FY2018
Low Risk: <1.1031
8 Variables -1.26 Medium Risk: >1.1031 and <1.465
5 Variables -1.63 High Risk: >1.465

The result for Ratio ID is 2.48. This is significant
red flag of High Risk. Therefore, FA.Tech suggests
Ratio Area of Concern FY2018 that there is a high risk of potential financial
statement fraud in Account Receivable.
Index
DI Account Receivable Need Further Review Ratio ‘GI’ is identified as Medium Risk
Low Risk: <1.014
GI Sales, COGS Medium Risk
Medium Risk: >1.014 and <1.193
AI Current Asset, PPE Low Risk High Risk: >1.193
SI Sales Low Risk The Result for Ratio GI is 1.09. This GI involves
accounts COGS and Sales.
DPI Depreciation Low Risk
‘LGI’ is identified as Medium Risk
SGI SG&A Expenses Low Risk
Low Risk: <1.037
LGI Debt and Current Liabilities Medium Risk Medium Risk: >1.037 and <1.111
TTA Operating Income and Cash Low Risk High Risk: >1.111
Flows The result for Ratio LGI is 1.040. FA.Tech
suggests while the result indicate it is medium
risk, but it is very close to Low Risk. Therefore,
no need to look at accounts on this LGI ratio.
“While regulators did not disclose details of the errors, Garuda’s
executives confirmed on Sunday that they were related to a
misrepresentation of $240 million in revenue that it had yet to
receive from PT Mahata Aero Teknologi”.
- Reuters.com
https://www.reuters.com/article/us-garuda-indonesia/airline-
garuda-indonesia-to-fix-financial-statement-after-regulator-
order-idUSKCN1TV0AW
Example 2 – Tiga Pilar Sejahtera Food Tbk
Ratio ‘DI’ involves Account Receivable, identified as Medium
Risk.
Ratio Index FY2018 Low Risk: <1.1031
8 Variables -2.34
High Risk: >1.465
5 Variables -1.44 The result for Ratio ID is 1.23. FA.Tech suggests that there is
a medium risk of potential financial statement fraud in
Account Receivable and Sales
Ratio Area of Concern FY2018 Ratio ‘GI’ is identified as High Risk

Index Low Risk: <1.014
DI Account Receivable Medium Risk High Risk: >1.193
The Result for Ratio GI is 2.021. Ratio GI involves accounts
GI Sales, COGS Need Further Review COGS and Sales. FA.Tech shows there is significant red flag
of High Risk in this ratio. there is high risk in Sales and
AI Current Asset, PPE Need Further Review Inventory account – this is a manufacturing company.
SI Sales Low Risk ‘AI’ is identified as High Risk

Low Risk: <1.039
DPI Depreciation Low Risk Medium Risk: >1.039 and <1.254
High Risk: >1.254
SGI SG&A Expenses Need Further Review
The result for Ratio AI is 1.924. Ratio AI involved current
assets and PPE (fixed assets). FA.Tech shows there is
LGI Debt and Current Liabilities Need Further Review significant red flag of High Risk in this ratio. Therefore,
FA.Tech suggests that there is a high risk of potential
TTA Operating Income and Cash Low Risk financial statement fraud in Current Assets and PPE (fixed
assets).
Flows
Example 2 – Tiga Pilar Sejahtera Food Tbk
Ratio Area of Concern FY2018 Ratio ‘SGI’ is identified as High Risk
Low Risk: <1.001
Index
DI Account Receivable Medium Risk High Risk: >1.041
The Result for Ratio SGI is 1.322. Ratio SGI involves accounts
GI Sales, COGS Need Further Review SG&A Expenses and Sales. FA.Tech suggests there is high risk
in Expenses.
AI Current Asset, PPE Need Further Review
SI Sales Low Risk ‘LGI’ is identified as High Risk
Low Risk: <1.001
DPI Depreciation Low Risk Medium Risk: >1.001 and <1.041
High Risk: >1.041
SGI SG&A Expenses Need Further Review
The result for Ratio LGI is 1.126. Ratio LGI involves debts
and liabilities. FA.Tech suggests there is high risk in debts
LGI Debt and Current Liabilities Need Further Review and liabilities.
TTA Operating Income and Cash Low Risk

Flows
“Ernst and Young found some differences between the internal data and
financial records used by the auditors. It explains that there are allegedly
Rp4 trillion (US$283.68 million) overstatement on the accounts of
receivable, inventories, and fixed assets in TPS Group. Moreover, there
are Rp662 billion sales and Rp329 billion EBITDA overstatement on the
subsidiaries.
The audit also found Rp1.78 trillion funds flow through several schemes
such as bank loan, time deposits withdrawal, funds transfer in the bank
account, and financing of expenses of affiliated parties, from TPS Group
to the former management”.
- theinsiderstories
https://theinsiderstories.com/knotty-problem-of-indonesias-tiga-pilar-
sejahtera/
Example 3 – ENRON
Ratio Index FY1997 FY1998 FY1999 FY2000
8 Variables -2.21 -2.02 -2.20 -0.57
5 Variables -2.46 -2.51 -2.58 -0.59
Ratio Area of Concern FY1997 FY1998 FY1999 FY2000

Index
DI Account Receivable Low Risk Low Risk Low Risk Medium Risk
GI Sales, COGS Need Further Review Low Risk Medium Risk Need Further Review
AI Current Asset, PPE Medium Risk Medium Risk Low Risk Low Risk
SI Sales Medium Risk Medium Risk Medium Risk Medium Risk
DPI Depreciation Need Further Review Low Risk Medium Risk Need Further Review
SGI SG&A Expenses Low Risk Low Risk Low Risk Medium Risk
LGI Debt and Current Low Risk Low Risk Low Risk Need Further Review
Liabilities
TTA Operating Income and Low Risk Low Risk Low Risk Low Risk
Cash Flows
Example 4 – TYCO INTERNATIONAL
Ratio Index FY1999 FY2000 FY2001
8 Variables -2.22 -2.26 -2.41
5 Variables -2.61 -2.74 -2.75
Ratio Area of Concern FY1999 FY2000 FY2001

Index
DI Account Receivable Medium Risk Low Risk Medium Risk
GI Sales, COGS Low Risk Low Risk Low Risk
AI Current Asset, PPE Medium Risk Medium Risk Low Risk
SI Sales Medium Risk Medium Risk Medium Risk
DPI Depreciation Need Further Review Medium Risk Need Further Review
SGI SG&A Expenses Low Risk Low Risk Low Risk
LGI Debt and Current Medium Risk Low Risk Need Further Review
Liabilities
TTA Operating Income and Low Risk Low Risk Low Risk
Cash Flows
Example 5 – Wirecard
8 Variables -2.05 -2.37 -2.47
5 Variables -2.61 -2.54 -2.67

Index
DI Account Receivable Medium Risk Low Risk Low Risk
GI Sales, COGS Low Risk Medium Risk Medium Risk
AI Current Asset, PPE Low Risk Medium Risk Low Risk
DPI Depreciation Low Risk Low Risk Low Risk
SGI SG&A Expenses Low Risk Low Risk Low Risk
LGI Debt and Current Liabilities Medium Risk Medium Risk Medium Risk
TTA Operating Income and Cash Low Risk Low Risk Low Risk
Flows
Example 5 – Wirecard
8 Variables -2.05 -2.37 -2.47
5 Variables -2.61 -2.54 -2.67

Index
DI Account Receivable Medium Risk Low Risk Low Risk
(86.0% go toward high risk) (95.0% go toward medium (94.9% go toward medium
risk) risk)
GI Sales, COGS Low Risk Medium Risk Medium Risk

(94.2% go toward medium (86.0% go toward high risk) (86.5% go toward high risk)
risk)
AI Current Asset, PPE Low Risk Medium Risk Low Risk

(83.1% go toward medium (87.6% go toward high risk) (97.7% go toward medium
risk) risk)
(82.4% go toward high risk) (90.2% go toward high risk) (83.5% go toward high risk)
DPI Depreciation Low Risk Low Risk Low Risk
(83.5% go toward medium (92.2% go toward medium (84.3% go toward medium
risk) risk) risk)
SGI SG&A Expenses Low Risk Medium Risk Low Risk

(83.1% go toward medium
risk)
(99.2% go toward high risk)
(99.2% go toward
medium risk)
LGI Debt and Current Liabilities Medium Risk Medium Risk Medium Risk
(95.0% go toward high risk) (98.6% go toward high risk) (94.0% go toward high risk)
TTA Operating Income and Cash Low Risk Low Risk Low Risk
(Still far from medium (Still far from medium (Still far from medium
Flows
“APA CONTOH DARI
PENIPUAN LAPORAN
KEUANGAN
(FINANCIAL
STATEMENT FRAUD)
DAN BAGAIMANA
CARA
MENDETEKSINYA?”
PAGE 28
“APARED FLAGS YANG SERING DITEMUKAN TERKAIT DENGAN
FICTITIOUS REVENUE?”
1 Jumlah piutang lama yang tertunggak yang tidak biasa dalam jumlah besar.
2 Piutang usaha dari pelanggan yang sulit atau tidak mungkin diidentifikasi dan dihubungi.
3 Pertumbuhan yang cepat atau profitabilitas yang tidak biasa, terutama dibandingkan dengan
perusahaan lain di industri yang sama.
4 Arus kas negatif berulang dari operasi atau ketidakmampuan untuk menghasilkan arus kas
positif dari operasi sambil melaporkan pendapatan dan pertumbuhan pendapatan.
Transaksi yang signifikan dengan pihak-pihak terkait atau entitas dengan tujuan khusus tidak
5 dalam kegiatan bisnis biasa atau di mana entitas-entitas tersebut tidak diaudit atau diaudit
oleh perusahaan audit terpisah.
6 Transaksi yang signifikan, tidak biasa, atau sangat rumit, terutama yang mendekati akhir
periode yang menimbulkan pertanyaan sulit.
7
Pertumbuhan yang tidak biasa dalam receivable ratio (Account Receivable/average daily
sales).
8
Volume penjualan yang signifikan ke entitas yang substansi dan kepemilikannya tidak
9 diketahui.
Transaksi terjadi pada weekend atau hari libur.

10
Penurunan inventory turnover dan pada waktu yang bersamaan memiliki pertumbuhan
penjualan yang tinggi
PAGE 29
Fabricated Revenue
• Cara mendeteksi:
 Hitung Gross Margin Rasio setiap bulan atau setiap kuarter.
 Analisa expense yang berhubungan erat dengan sales.
 Lihat supporting dokumen nya.
 Lakukan pengecekan pada aktivas penjualan dan adjustment.
 Lakukan pengujian pada laporan aging piutang.
 Analisa shipping cost.
 Untuk auditor konfirmasi langsung ke customer untuk total balance.
Improper Recording of Sales Returns, andAllowances, and Discounts

 Lakukan analisa perbandingan sales return dan allowance.
 Pegecekan ke invoice dan jurnal penjualan.
 Cek jika ada biaya off-site storage yang mungkin digunakan untuk
menyembunyikan barang yg di return.
 Konfirmasi piutang dengan kostumer.
Improper Capitalisation
 Vouching expenditure.
 Men-trace transaksi.
 Analisa PPE nya (property, plant, and equipment) nya.
PAGE 30
Omitted Expenses and Liabilities.
 Cek minutes of meeting BOD meeting.
 Hitung Current Rasio.
 Lakukan konfirmasi liabilities ke vendor.
Fictitious Inventory.
 Hitung inventory turnover rasio (COGS/average inventory).
 Lakukan test perbandingan antara data yang dicatat di system dan
stocktake sheet.
 Lakukan site visit ke warehouse untuk observasi secara langsung.
FictitiousAssets.
 Pilih beberapa fixed asset dari GL dan lakukan vouching ke supporting
document.
 Lakukan pengujian atas kepemilikan asset.
 Lakukan pengujian untuk intangible assets dan check appraisal value pada
appraisal report dengan nilai yg dicatat.
PAGE 31
“BAGAIMANAFORENSIC
ACCOUNTING BISA
MEMBANTU EXTERNAL
AUDITOR DAN
CORPORATE FINANCE
DALAM MENGURANGI
TERJADINYA RESIKO
FRAUD?”
PAGE 32
PAGE 33
PAGE 34
FORENSIC
ACCOUNTANT
AUDITOR
PAGE 35
“Mergers and
Acquisitions require
a large amount of
company resources,
both money and
time”.
PAGE 36
“A client in Melbourne has acquired a Dental practice. They
alleged the Seller had deliberately inflated revenues before the
sale of a Dentist Practice (which sold for $1.7 million ). Our
forensic accounting investigation identified fraud for
duplicating fee and miscoded nearly $800K, over $570K
where procedures were ‘written up’, 80.5% decrease in
monthly fees post-purchase and 238 instances of very rare code
totalling $242k”.
“a high-profile case was observed from Hewlett-Packard

after they purchased Autonomy, a British software
company, in 2011 for $11.1 billion. It was reported that
HP thought Autonomy has a 64% premium for a company
with nearly $1 billion of 2010 revenues, and possessing “a
consistent track record of double-digit revenue growth,
with 87 percent gross margins and 43 percent operating
margins.” Little more than a year later, HP recorded an
$8.8 billion impairment charge, citing Autonomy’s
accounting improprieties as the reason. Investors wondered
how could HP have gotten it so wrong before they plunked
down $11.1 billion in cash?
HP filed a lawsuit against Mike Lynch, Autonomy’s founder,
and his finance director, Sushovan Hussain, in a high court
in London, accusing them of being involved in inappropriate
transactions with software retailers and questionable
accounting practices. HP launched a $5 billion (£ 3.3
billion) fraud against Mike Lynch, claiming that he had
inflated his business revenue of around $700
million over a two and a half year period.” PAGE 37
BEBERAPA HAL YANG AKAN DI-CHECK
OLEH FORENSIC ACCOUNTANT KETIKA
MEMBANTU DALAM M&A?
► Fictitious sales/revenues
► Improper revenue recognition
► Improper asset valuations
► Concealed liabilities and expenses
► Improper disclosures.
PAGE 38
Q A
“BAGAIMANAAKUNTANSI
FORENSIK MELAKUKAN
DATAANALYSIS
SEDERHANA UNTUK
MENDETEKSI RED FLAGS
FRAUD? (MENGGUNAKAN
APLIKASI EXCEL)?”
PAGE 40
“BAGAIMANA CARA
MEMITIGASI FRAUD
DAN BAGAIMANA
INTERNAL CONTROL
PERUSAHAAN
MENJAGAASET
PERUSAHAAN?”
PAGE 41
Kontrol atas transaksi signifikan yang tidak biasa
Kontrol atas journal entry dan adjustment yang dilakukan

pada akhir periode proses pelaporan pembiayaan.
Kontrol atas transaksi dengan pihak terkait.
Kontrol terkait dengan estimasi manajemen yang

signifikan.
Kontrol yang dapat mengurangi motivasi dan tekanan

pada manajemen untuk terlibat dalam earning
management yang tidak dibenarkan dan kecurangan
laporan keuangan.
“AUDITOR HARUS SECARA KHUSUS MENGEVALUASI KONTROL UNTUK MENGATASI ADANYA

RISIKO MANAGEMENT OVERRIDE DAN UNTUK MELIHAT JIKA PENGENDALIAN INTERNAL
PERUSAHAAN SUDAH CUKUP KUAT UNTUK MENGATASI RESIKO MISSTATEMENT YANG
MATERIAL DALAM LAPORAN KEUANGAN KARENA FRAUD”
PAGE 42
10 HAL YANG DAPAT DILAKUKAN UNTUK MEMPERKUAT
INTERNAL CONTROL DI PERUSAHAAN
1 2 3 4 5
Develop Adequate
Ensure Duties Are Physical Control of Identify Risks in Your Develop Written Policies
Segregated Assets Office Correct Errors Promptly and Procedures
6 7 8 9 10
Perform a Self-
Evaluation of Your
Internal Control
Maintain Adequate
Perform Reconciliations Review and Approve Provide Adequate
Supporting
Regularly Processes/Transactions Training to Staff
Documentation
PAGE 43
ADDITIONAL
“BAGAIMANA CARA MELAKUKAN WAWANCARA

INVESTIGATIF DAN MEMBUAT LAPORAN
WAWANCARA?”
https://acch.kpk.go.id/images/tema/litbang/modul
-integritas/Modul-10-Wawancara-Investigatif.pdf PAGE 44
P.E.A.C.E
P = Planning and Preparation E = Engange and Explain
• Penentuan maksud dan tujuan wawancara • Perkenalan dan pendekatan awal kepada terwawancara.
• Pengenalan awal (Profiling) dari calon terwawancara • Pemberian penjelasan tujuan dan maksud wawancara
• Penentuan pewawancara (pewawancara utama and kepada terwawancara.
pendamping) • Pemberian penjelasan hak-hak terwawancara selama
• Penentuan waktu yang tepat berlangsungnya proses wawancara termasuk prosedur
• Penentuan dan persiapan tempat atau ruangan wawancara (hukum) yang berlaku.
• Penyiapan sarana pendukung wawancara • Pengisian formulir baku bagi terwawancara.
• Penyiapan administrasi wawancara • Pengamatan singkat atas profil terwawancara.
A =Account
Dua teknik yang dapat digunakan pewawancara:
• Cognitive interview/free recall/ingatan bebas
• Conversation management/manajemen percakapan
Hal yang perlu dikuasai oleh pewawancara:

• Pertanyaanterbuka: Tellme/Ceritakan; Explain/Jelaskan;
Describe/Jelaskan/Gambarkan
• Pertanyaan menggali dengan menggunakan kata tanya 5W
1H
• Pertanyaan tertutup untuk mengklarifikasi suatu
informasi.
C = Closure E = Evaluasi
• Pengecekan kembali atas materi wawancara atau • Evaluasi atas pencapaian tujuan wawancara.
keterangan yang ingin diperoleh. • Penentuan rencana investigasi selanjutnya.
• Konfirmasi ulang atas ketepatan dan kebenaran • Evaluasi atau penilaian atas terwawancara.
keterangan terwawancara. • Evaluasi atau penilaian atas pewawancara.
• Penyelesaian administrasi wawancara. • Penulisan resume hasil wawancara.
• Penjelasan tentang dampak lanjutan wawancara kepada
terwawancara.
• ) Pengakhiran pertemuan dengan terwawancara.
Diketahui, 2/01/2020
Pewawancara Saksi Terwawancara

ADDITIONAL
“BAGAIMANA MENGUMPULKAN DAN

MENYIMPAN BUKTI PENIPUAN DAN
MEMPERSIAPKAN LAPORAN INSIDEN
PENIPUAN?”
Pengumpulan dan Penyimpanan:
1. Simpan seluruh dokumen investigasi ditempat yang
aman dan rahasia. Perlakukan semua dokumen dan
data secara confidential.
2. Buat Salinan data atau dokumen
3. Batasi akses ke tempat penyimpatan dokumen,
hanya untuk team yang terlibat dalam investigasi
tersebut.
Penyimpanan Setelah Laporan Investigasi Selesai:

1. Informasikan kepada Klien apakah anda akan
menyimpan data dan dokumen atau tidak. Jika
anda ingin menyimpan, beritahu kepada Klien
berapa lama anda akan menyimpan. Jika
memutuskan untuk menyimpan, simpan seluruh
dokumen investigasi ditempat yang aman dan
rahasia.
2. Jika tidak menyimpan, maka sampaikan kepada
Klien bahwa Klien akan bertanggung jawab jika
dokumen dibutuhkan di pengadilan.
3. Untuk yang bekerja di perusahaan, mengacu pada
policy perusahaan berapa lama dokumen harus di
simpan.
Q A
TAKE HOME LESSON
 Berkaca pada setiap kasus-kasus besar yang terjadi atau bencana alam yang melanda suatu daerah, maka tindak kecurangan akan
meningkat - demikian juga dengan kasus Covid-19.
 Auditing, Fraud Examination dan Forensic Accounting berbeda, namun berkaitan satu dengan yg lain.
 Auditor (internal/external dan forensic investigator) perlu memahami dan memperhatikan red flags yang berkaitan dengan kecurangan
dalam laporan keuangan. Memiliki pemahaman atas contoh kasus-kasus kecurangan dan korupsi adalah penting bagi auditor (bagaimana
kecurangan tersebut dapat terjadi).
 Financial Ratio analysis dapat digunakan untuk mendeteksi adanya red flag kecurangan dalam laporan keuangan. Applikasi data analysis
forensic accounting juga dapat dipakai untuk membantu menemukan red flag.
 Resiko Fraud bukan hanya mungkin terjadi dalam kegiatan audit laporan keuangan, namun bisa juga terjadi dalam banyak kegiatan
transaksi lainnya, seperti dapat terjadi dalam Merger & Acquisition.
 Auditor harus secara khusus mengevaluasi kontrol untuk mengatasi adanya risiko management override dan untuk melihat jika
pengendalian internal perusahaan sudah cukup kuat untuk mengatasi resiko misstatement yang material dalam laporan keuangan karena
fraud.
 Perusahaan perlu memperhatikan kuat atau lemahnya internal control di suatu perusahaan/organisasi.
PAGE 49
PAGE 50
Thank You
PAGE 51
Day 3
“Forensic Accounting and
Investigative Auditing on
Fraud Detection
(Case Study in Indonesia
& Australia)”
EMMAN MARPAUNG M.FCG, CFE, Cert III
EMMAN MARPAUNG
Education and Certification
• Bachelor of Accounting - University of Bengkulu, Indonesia
• Fulbright Scholarship – University of Mississippi, USA
• Master of Forensic Accounting and Financial Crime – Macquarie University, Australia
• Association of Certified Fraud Examiners (ACFE) – Sydney Chapter
• Cert III – Private Investigator New South Wales, Australia
• Founder Forensic Accounting Tech. application (FA Tech).
Work Experience
• PwC Indonesia – Forensic Services
• BDO Australia in Sydney – Forensic Services
• BDO Indonesia – Forensic Services
• Integrity Indonesia - Forensic Investigation Services
• Ernst & Young Indonesia – Forensic Investigation & Dispute Services
• KPMG Indonesia – Forensic Services
Forensic Accounting and Investigative
Auditing in Mitigating Fraud
(Case Study in Indonesia)
AGENDA
• FIVE (5) PRINCIPLES OF FRAUD AND CORRUPTION
• FRAUD AND ECONOMIC CRIME SURVEY – BY PwC
• FRAUD AND CORRUPTION – CASE STUDY IN INDONESIA
• FRAUD AND CORRUPTION – CASE STUSY IN AUSTRALIA
• FINANCIAL STATEMENT FRAUDS, RED-FLAGS, AND HOW TO

DETECT THEM
FIVE (5)
PRINCIPLES OF
FRAUD AND
CORRUPTION
There is no one solution
PAGE 5
Source: ACFE Report to The Nations2020 Asia Pacific Region
Fraud and Corruption are ever changing
PAGE 6
Source: ACFE Report to The Nations 2020 Asia Pacific Region
Prevention is the most effective way to address fraud
and corruption
“Preventing fraud through effective counter

fraud practices reduces loss and reputation
damage. It also requires fewer resources
than an approach focused on detection and
recovery.”
There is always going to be fraud
PAGE 8
Source: ACFE Report to The Nations 2020 Asia Pacific Region
Finding fraud is a good thing
“Doing the right thing not always meant that

right things would happen to you.”
PAGE 9
FRAUD AND
ECONOMIC CRIME
SURVEY – OLEH
PwC
Size, scale and depth of global survey
5,000+ respondents 99 territories

171 Indonesian survey respondents
>50% >70%
of Indonesian
of respondents
respondents have a
represent privately
US$ 100 million
owned companies
annual turnover
>66%
of global and
Indonesian
respondents were
C-suite
PAGE 11
On Average, One In Ten Companies Reported More Than Ten Incidents Of Fraud In
The Last 24 Months
Source: PwC - GECS2020 Fraud and EconomicCrime

Fraud, Corruption Or Other Economic Crime Continues To Show An Increasing
Trend Of Reported Fraud In Most Territories, Including Indonesia
Source: PwC - GECS2020 Fraud and EconomicCrime

The top five most disruptive impacts
Source: PwC - GECS 2020 Fraud and Economic Crime

Most disruptive fraud events – by industry
Source: PwC - GECS2020 Fraud and Economic Crime

FRAUD AND
CORRUPTION – CASE
STUDY IN INDONESIA
INVOICE FINANCING
FRAUD
An Invoice Financing Fraud Case - HOW TO DETECT IT?
Indonesia Analyse expenses dan revenues journals
Reconstruct journals dan iidentify irregularities

1.Jan 2012 PLN hold a tender
for Engineering, Construction, Conduct interview
& Procurement (ECP) project
and the tender won by “PT
2. Oct 2012 “PT Bumi
Bumi Perkasa”
Project Owner 5.March 2013 “BRI
Perkasa” required
(PLN) fresh funds, however Syariah” issued L/C for
“BRI Syariah” can only invoices issued by
provide A/P and L/C “Altria”. L/C will
facilities. mature in 8 months.
8. “PT Bumi Perkasa”
received USD 1,7 million
from “GP” and owed “BRI “PT Bumi Perkasa” BRI Syariah
Syariah” worth USD 1,8 (Anak Perusahaan Bank (“BRI
million. Difference of USD
100K as fee for “Altria”.
BUMN) Syariah”)
Money of USD 1,7 million 4.March 2013 - “PT
partly used not in function Bumi Perkasa” Sent a
– Entertainment Fee. Fake PO to “Altria”, 3. March 2013 “PT Bumi
then “Altria” sent Perkasa” collude with
Early in 2016, the directors Invoice for that fake “Altria” to commit Invoice 7. Nov 2013 –
resigned. PO. For payment, “PT Financing Fraud. “BRI Syariah” paid
Bumi Perkasa” used maturity L/C
L/C. PO Value is USD worth USD1,8
million to “Altria”
1,8 million
through Standard
Altria Capital Standard Chartered Bank di
London.
Pte Ltd Chartered
6. March ‘13 “GP” “Altria”
represented
Bank, London
“Altria” (affiliation)
transferred money
to PT Bumi Global Trading Since the "PT Bumi Perkasa" is a
Perkasa’s Account Pte Ltd “GP” Subsidiary of State-Owned
worth USD 1,7
million to
Enterprises, the government
complicate tracking lost millions of dollars
FRAUDULENT REVENUE
RECOGNITION – CASE
STUDY IN INDONESIA
Case “Fraudulent Revenue Recognition”
1. The client recognise revenue 40% 60%
based on cost base instead of
percentage of completion (not in
line with PSAK).
2. Inflate revenue without

supporting document
PTABC (Client)
Understand the contract

agreement
Reconstruction of revenue journal

based on GL
Request the Supporting document

of revenue (signed by the
company, customer, and
evaluator)
Legend
Invoices were approved by the

project owner
Invoices have not been approved
by the project owner
Fake revenue
MULTIPLE
VENDOR PAYMENT
FRAUD – CASE
STUDY IN
AUSTRALIA
Occam Refinery Pty Ltd Case “Multiple Vendor Payment Fraud”
Acc 1. Main Account
Acc 2.
Acc 3.
Credit Card Account
Acc 4.
Sport Bet Account (Gambling)
Acc 5. Our forensic accounting investigation identified:

• Total of over AUD 4.2 million was defrauded through
multiple vendor payment fraud. There were more than 1
Acc. 6 time payments made for one invoice.
• Over AUD420K GST (VAT) fraud. Claimed GST to the
Australian Tax Office for GST that were never paid.
Acc. 7
FINANCIAL STATEMENT
FRAUD, RED-FLAGS, AND
HOW TO DETECT THEM
Fabricated Revenue
How to detect:
 Calculate Gross Margin Ratio monthly or quarterly.
 Analysis of costs that are closely related to sales.
 See supporting documents.
 Check sales activity and adjustments.
 Perform testing on accounts receivable aging reports.
 Shipping cost analysis.
 For the auditor to confirm directly to the customer for the total balance
Improper Recording of Sales Returns, and Allowances, and Discounts

How to detect:
 Perform a comparison analysis of sales returns and allowances.
 Checks to invoices and sales journals.
 Check for any off-site storage fees that might be used to hide returned items.
 Confirm receivables with customers
Improper Capitalisation
How to detect :
 Vouching expenditure.
 Trace the transactions.
 Analyse the PPE (property, plant, and equipment).
Fictitious Inventory.
How to detect :
 Calculate the inventory turnover ratio (COGS/average inventory).
 Perform a comparison test between the data recorded in the system and the
stocktake sheet.
 Do a site visit to the warehouse for direct observation
PAGE 23
Questions &
Answers
PAGE 24
Day 4
FORENSIC
ACCOUNTING
VS
INVESTIGATIVE
AUDITING
Audit Webinar
IkatanAkuntan Indonesia (IAI)
Bersama anda hari ini…
Vidvant Brahmantyo SE.Ak., CA, CIA, CFE
Partner di RSM Indonesia
Ikatan Akuntan Indonesia (IAI) Forensic Accounting vs Investigative Auditing

Agenda
• 13.00 – 13.05 Opening
• 13.05 – 13.35 Introduction to Fraud
• 13.35 – 14.05 Forensic Accounting vs Investigative Auditing

• 14.05 – 14.35 Fraud Risk Management & Three Lines Model
• 14.35 – 15.05 Looking Forward: The Future of Forensic Accounting
• 15.05 – 15.10 Key Takeaways
• 15.10 – 15.25 Q&A?
• 15.25 – 15.30 Closing
Ikatan Akuntan Indonesia (IAI) Forensic Accounting vs Investigative Auditing 3

Session 1
Introduction to Fraud
Fraud Defined
Fraud Act (2006)
• "Fraud by false representation" is defined as a case where a person makes "any representation
as to fact or law ... express or implied" which they know to be untrue or misleading.
• "Fraud by failing to disclose information" is defined as a case where a person fails to disclose
any information to a third party when they are under a legal duty to disclose such information.
• "Fraud by abuse of position" is defined as a case where a person occupies a position where
they are expected to safeguard the financial interests of another person, and abuses that
position; this includes cases where the abuse consisted of an omission rather than an overt
act.
In all three classes of fraud, it requires that for an offence to have occurred, the person must have
acted dishonestly, and that they had to have acted with the intent of making a gain for
themselves or anyone else, or inflicting a loss (or a risk of loss) on another.

Fraud As Defined By Otoritas Jasa Keuangan (OJK)
POJK No. 39/POJK.03/2019 tentang Penerapan Strategi Anti Fraud bagi Bank
Umum
Fraud adalah tindakan penyimpangan atau pembiaran yang sengaja dilakukan

untuk mengelabui, menipu, atau memanipulasi Bank, nasabah, atau pihak lain,
yang terjadi di lingkungan Bank dan/atau menggunakan sarana Bank sehingga
mengakibatkan Bank, nasabah, atau pihak lain menderita kerugian dan/atau
pelaku Fraud memperoleh keuntungan keuangan baik secara langsung maupun
tidak langsung.

Error vs Fraud
 Error are unintentional misstatements or omission in financial statements
 Fraud, in contrast, arises from deceitful financial reporting and from

misappropriation of assets
 Intent is the primary difference between an error and fraud

The Fraud Tree / Classification System
Sumber: 2020Associationof Certified FraudExaminers (ACFE) Reportto the Nationon OccupationalFraud& Abuse.
The Fraud Triangle
• Greed
• Higher stature
• Personal debt, financial losses
• Personal problems
• Market expectation
• Compulsive habits: gambling, drugs,
alcohol, cars, shopping, affairs…etc
• Family/peer/other pressure
• Lack of controls (preventive and

detective)
• Poor compliance with controls
• Revenge
• Lack of monitoring and oversight
• I deserve more
• Absence of visible disciplinary policies
• Wealth will gain me recognition
• Failure to investigate allegations of fraud
• Rules are for others and misconduct
• Everyone does it • Failure to discipline perpetrators
• No one will get hurt • Failure to recruit collateral staff for their
observation of subtle behavior
Fraud in Asia–Pacific
• Overall losses in the Asia–Pacific region were 3rd higher
below Southern Asia region and Western Europe region.
• The median loss for the 198 Asia–Pacific cases was
US$195,000.
• Corruption schemes were more than twice as common as
any other scheme type, followed by the misappropriation
of noncash assets and misappropriation of expense
reimbursement.
Sumber: 2020 Association of Certified Fraud Examiners (ACFE) Report to the Nation
on Occupational Fraud & Abuse.
Corruption Perception Index 2019
Meningkat 2 poin dibandingkan tahun sebelumnya, Indonesia saat ini masih berada di bawah nilai rata-rata region Asia
Pacific (45/100).
Year Score
2012 32
2013 32
2014 34
2015 36
2016 37
2017 37
2018 38
2019 40
Sumber: https://www.transparency.org/cpi2019
The Corruption Perceptions Index ranks 180 countries and territories by their perceived levels of public
sector corruption, according to experts and business people.

Fraud Detection in Asia–Pacific
• The distribution of detection methods was
very similar to that observed overall.
• The top three mechanisms, Tip
(Whistleblowing System-WBS), Internal
Audit, and Management Review,
accounted for more than 70% of frauds
detected in Asia–Pacific.
Sumber: 2020 Association of Certified Fraud Examiners (ACFE) Report to the Nation
on Occupational Fraud & Abuse.

Classifying Red Flag Behaviors
In 52% of cases, the fraudster exhibited red flags In 63% of cases, the fraudster exhibited red flag
connected to their work duties. behaviour associated with his or her personal life.
Sumber: 2020 Association of Certified Fraud Examiners (ACFE) Report to the Nation on Occupational Fraud & Abuse.
Most Notorious Case – Enron (2001)
• In April 2001, Fortune Magazine listed ENRON as the 7th largest
company in the USA and most Innovative Company.
• Six months later, ENRON filed for bankruptcy.
• Greatest accounting fraud of 20th century.
• 12,000 people directly lost their jobs, retirement benefits and entire
life savings.
• Pensioners who bought stocks of Enron lost US$70 billion when
price of stock collapsed to ZERO.
• Caused by “Lax Auditing” by Arthur Andersen accounting firm , one
of the “Big 5” (85,000 people and over US$9billion annual
revenues) collapsed.
• Others to blame: CFO Andrew Fastow (6 years prison sentence),
CEO Jeff Skilling (24 years prison sentence), stock analysts who keep
pushing Enron stock, senior management for hiding losses in
dubious off-balance-sheet partnerships, media exaggeration and
frenzy.

Reminder: Financial Fraud Fears
https://youtu.be/VCcC-mY0eM8
Session 2
Forensic Accountingvs Investigative Auditing
Definition of Forensic Accounting vs Investigative Auditing
Forensic Accounting is the action of identifying, recording, settling, extracting,

sorting, reporting, and verifying past financial data or other accounting activities
for settling current or prospective legal disputes or using such past financial data
for projecting future financial data to settle legal disputes.
VS
Investigative Auditing is detailed scrutiny of selected activities which will help
client understand the process in a better and comprehensive way. An
Investigative Auditing is the complete enquiry of specific accounts or records of a
business and generally used to prove a particular fact.

Role of Forensic Accountant vs Investigative Auditor
A Forensic Accountant may take on fraud auditing engagements and may be a

investigative auditor, but he or she will also use other accounting, consulting,
and legal skills in broader engagements. In addition to accounting skills, he or she
will need a working knowledge of the legal system and excellent communication
skills to carry out expert testimony in the courtroom and to aid in other litigation
support engagements.
VS
Investigative Auditor is a fraud examiner (could be an accountant), especially
skilled in auditing, who is generally engaged in auditing with a view toward fraud
discovery, documentation, and prevention.

Contrasting Audit, Fraud Examination, and Forensic Accounting
Characteristic Audit Fraud Examination Forensic Accounting
Time perspective: Historical Historical Future and historical
Primary focus: Periodic Reactive Proactive and ongoing
Investigation scope: Narrow Narrow Broad ranging
Main work product is: Audit opinion Fraud case report Forensic audit report
Main responsibility to: Company and Defrauded party Concerned principal or third
public party
Guidelines are: Rules-based Principles-based; under audit Principles-based
rules, it is rule-based
Purpose of report: Ensure GAAP is Identify perpetrator of fraud Fraud risk assessment and
followed strategic services
Professional stance: Non-adversarial Adversarial Adversarial and non-

adversarial

Forensic Accountant Detailed Roles and Responsibilities
Use sophisticated computer program
Performs investigative accounting as well as litigation support
Use both accounting and investigating skills to interpret financial evidence
Expert Witnesses
Calculate economic damage

Accountant’s Role in Fraud Detection
• In the early 1980s, companies began to use computers to perform their record
keeping.
• Intense competition caused auditing fees to fall as much as 50% from the mid-
1980s to the mid-1990s.
• Auditors cut costs by reducing the process of reviewing hundreds of corporate

accounts. They grew more reliant on internal controls.
• Top executives were able to circumvent internal controls and manipulate the
records.
• This lead to situations such as Enron, WorldCom, Xerox, Adelphia

Communication, and the fall of Arthur Andersen in the early 2000s.

Accountant’s Role in Fraud Detection (Cont’d)
• Due to the financial disaster of companies such as Enron and WorldCom, there
has been an increased use of forensic techniques in audits and an increase in
fees.
• Some accounting experts believe that every audit engagement should include
much more scepticism and detailed review of transactions.
• Other accounting experts suggest that only special engagements specifically

targeting fraud can adequately and effectively root out the problem.
• The Big Four and the next two accounting firms believe that every public
corporation should have a forensic audit every three years

What is the Impact?
Auditor need to added several additional procedures that may be used to cover
a potential financial statement fraud:
Extensive use of interviews and leveraging techniques designed to elicit
sufficient information to prove or disprove a hypothesis.
Document inspection that may extend to authentication procedures and

handwriting analysis.
Significant public records search to uncover, for example, unexpected title or

ownership, other known addresses, and prior records of individuals.
Legal knowledge regarding rules of evidence including chain of custody and

preservation of evidence integrity.
Sumber: Annett Stalker and M.G. Ueltzen, “An Audit Versus A Fraud Examination,” CPA Expert, Winter 2009, p. 4.

Forensic Accountant Expected Skill Set
Investigative
Auditing
Forensic
Accountant
Law Accounting
Criminology

Related Professional Certifications
Forensic Accountant Investigative Audit
Issued by Institute of Certified Forensic Accountant Issued by Association of Certified Fraud Examiner
Audit
Issued by Ikatan Akuntan Publik Indonesia (IAPI)

Forensic Accountant Characteristics
Detail oriented
Persistent
Ambitious
Highly organized
A great deal of creativity

Similarity Between Auditor, Investigator & Forensic Accountant
Beberapa kesamaan yang dimiliki antara Auditor, Investigator dan Forensic Accountant, diantaranya
adalah:
 Praktisi di setiap area harus memiliki pemahaman yang luas tentang tren bisnis dan industri;
 Pemahaman menyeluruh tentang masalah, waktu, dan proses audit;
 Pemahaman tentang jenis catatan dan dokumen keuangan yang harus ada untuk mendukung
jumlah yang dicatat; dan
 Kepedulian tentang dampak fraud terhadap operasi perusahaan.
Auditor, Investigator dan Forensic Accountant memiliki tujuan yang sama, yaitu:
Pelaporan keuanganperusahaan yangsepenuhnya sesuai dengan prinsip akuntansi yang berlaku umum.
Auditor Laporan Keuangan harus terus mengembangkan teknik baru untuk mengungkap
lebih banyak indikasi fraud.
Ketika indikasi fraud muncul, Auditor Laporan Keuangan dapat mempertimbangkan untuk
melibatkan Forensic Accountant terlatih dan berpengalaman untuk membantu dalam
mengembangkan dan menerapkan prosedur investigasi yang akan membantu menyelesaikan
masalah atau tuduhan atas fraud tersebut.
Forensic Accountant’s Skill

Forensic Accountant’s Skill

Session 3
Fraud Risk Management & Three Lines Model
A COSO - Consistent Approach for Fraud Risk Management
•Tone at the top
•Code of Conduct/Ethics • Identify fraud risk
•Whistleblower Hotline factors, fraud risks
Creating and fraudschemes
a Control
Environment
Performing
Monitoring Fraud Risk
Activities Assessments
AFPC
• Monitoring
effectiveness of
antifraud programs Sharing Designing and
and controls Information and Implementing
Communication Antifraud
Control
Activities
• Effective communication • Link or map
of antifraud programs identified fraud
AFPC: Anti Fraud Programs & risks to control
and controls throughout
Controls activities
the Organization
Source: Committee of Sponsoring Organizations of the Treadway Commission, Anti Fraud Program & Controls (AFPC)
Integrating Fraud Risk Management & ERM
Board of Directors Fraud Risk Governance

Risk Governance
Executive Management
Fraud Strategy & Policy
Risk Infrastructure &
Oversight
Fraud
Business Units Prevention,
Risk Ownership Detection &
Investigation

Fraud Risk Assessment
Elements of the fraud risk assessment on which management may

focus its AFPC efforts include:
• Identify Fraud Risk Factors Creating a

Control
Environment
• Identify Fraud Risks Performing
Fraud Risk
Monitoring
• Consider Potential Fraud Schemes Activities
Assessments
• Map Specific Identified Risks Sharing Designing and

Information and Implementing
• Mitigating Control Activities Control
Activities
• Risk Treatment

Management’s Fraud Risk Assessment Overview
Step Approach Output
 Schedule of fraud risk factors

Identify & Evaluate  Sound knowledge of fraud risk
1  Identify fraud risk factors
Fraud Risk Factors environment
 Identify fraud risks

Identify Possible Fraud  Identify specific fraud schemes  Pervasive & specific fraud risks
2 Schemes & Scenarios  Identify account balances and potential  Catalog of fraud schemes
errors related to each fraud risk
 Analyze the likelihood and significance of  Inherent Risk Rating (IRR) of entity
Analyze Fraud Risks &
possible fraud schemes  Catalog of existing controls
3 Evaluate Control Design  Fraud Control Risk Rating
 Link fraud schemes to mitigating controls &
& Implementation evaluate control design and implementation  Fraud Risk Related Control Gap Analysis
Evaluate Fraud Risk  Residual Risk Rating (RRR)
 Evaluate the results of fraud risk analysis
Assessment Results &  Identification of fraud risks requiring
4 against established criteria and prioritize
Prioritize Residual further treatment
risks for treatment
Fraud Risks  Fraud risks prioritized
 Prepare Fraud Risk Action Plan  Fraud Risk Action Plan

5 Risk Treatment
 Implement Plan  Fraud Risks Treated

Management’s Fraud Risk Assessment Sample Documentation

Fraud Deterrence Cycle
Budaya yang ditetapkan dan Investigasi atas dugaan fraud serta

ekspektasi perilaku dengan tujuan proses perbaikan ke depan yang
untuk mencegah pelaku fraud menjawab root cause dari fraud
tersebut
Kontrol yang dirancang untuk

membantu memastikan bahwa
Dirancang untuk membantu
yang terjadi hanya transaksi yang
mendeteksi fraud sebelum hal
valid, terotorisasi, dan sah serta
tersebut menjadi besar
untuk melindungi aset perusahaan
dari kerugian akibat fraud

Three Lines Model in Fraud Deterrence
Setiap lini memiiki tugas Untuk memastikan keefektifan implementasi Tata Kelola Perusahaan yang baik, organisasi perlu meningkatkan
dan peran berbeda – beda peran dari masing – masing lini pertahanan secara memadai. The Institute of Internal Auditors (IIA)
terkait pencegahan fraud memperbarui Three Lines Model sebagai cara untuk menjelaskan hubungan serta peran antara lini dan
tanggung jawab setiap lini pertahanan di perusahaan.
Accountability,
reporting
Delegation,
direction,
resources,
oversight
Allignment
communication
, coordination,
collaboration

Governing Body in Fraud Deterrence
Governing Body (Dewan Komisaris dan Direksi)

memiliki tanggung jawab yang sama dalam beberapa
aspek dalam pencegahan fraud, diantaranya:
• Menetapkan “tone at the top" yang mengkomunikasikan laporan keuangan yang transparan dan akuntabel
• Menanggapi dengan cepat, adil, dan proporsional terhadap pelanggaran (fraud) yang terjadi
• Mempertahankan proses audit internal dan eksternal yang independen
• Memastikan aliran informasi penting yang tepat ke baik secara internal maupun ke pihak eksternal
• Menetapkan sistem pengendalian internal yang memadai
• Melakukan penyelidikan serta melakukan remediasi masalah fraud yang muncul

First Line in Fraud Deterrence
First Line merupakan garda terdepan dalam sistem tata kelola perusahaan,
manajemen risiko, dan pengendalian internal dalam mendeteksi fraud.
Tanggung jawab First Line dalam aspek pencegahan fraud, diantaranya:

• Memahami bisnis, prosedur pengendalian internal yang berlaku, proses
penganggaran, kebijakan akuntansi, industri, dan iklim ekonomi umum
yang mempengaruhi Perusahaan
• Pemahaman yang memadai tentang bisnis perusahaan serta
hubungannya dengan mitra bisnis, vendor, dan pelanggan sangat penting
untuk evaluasi yang tepat atas faktor risiko fraud
• Melakukan deteksi dengan menggunakan prosedur analisis
• Melakukan deteksi terhadap perubahan-perubahan yang tidak sesuai dengan prosedur yang berlaku
• Penggunaan sistem informasi dan teknologi secara efektif

First Line’s Fraud Alarm
• Perbedaan dalam catatan akuntansi • Bukti yang hilang maupun yang bertentangan
 Transaksi yang tidak dicatat secara lengkap atau  Dokumen hilang
tepat waktu atau tidak dicatat dengan benar dalam  Tidak tersedianya dokumen asli, hanya dokumen
jumlah, periode akuntansi, klasifikasi, atau fotokopi ataupun elektronik
kebijakan perusahaan
 Item penting yang tidak dapat dijelaskan dalam
 Saldo atau transaksi yang tidak didukung dokumen proses rekonsiliasi
pendukung yang sah
 Bukti dokumen yang tidak biasa, seperti perubahan
 Adjustment yang signifikan di menit-menit terakhir tulisan tangan pada dokumen yang biasanya dicetak
 Akses karyawan ke sistem serta catatan secara elektronik
pembukuan yang tidak sesuai dengan  Tanggapan yang tidak konsisten, tidak jelas, atau
wewenangnya tidak masuk akal dari pihak terkait
 Perbedaan signifikan yang tidak direkonsiliasi, tidak  Anomali antara catatan pembukuan perusahaan dan
diselidiki, dan dikoreksi secara tepat waktu balasan konfirmasi dari pihak ketiga
 Laporan tentang dugaan fraud  Hilangnya uang kas, persediaan atau aset fisik
• Dokumen palsu atau yang diubah lainnya secara signifikan
 Tipe dan ukuran font tidak konsisten  Bukti elektronik yang hilang atau tidak tersedia,
 Tidak tertulis alamat yang jelas dimana hal ini tidak sesuai dengan kebijakan
penyimpanan dokumen perusahaan
External Assurance Providers in Fraud Deterrence
Financial Auditor merespon risiko fraud pada laporan keuangan, sedangkan

Forensic Accountant merespon pada kecurigaan, tuduhan, atau bukti fraud.
Financial Auditor Forensic Accountant

Objektif Membentuk opini atas laporan keuangan Mencari pembuktian terhadap kemungkinan
dan/atau besarnya fraud yang terjadi
Tujuan Semua pemangku kepentingan perusahaan Pihak internal perusahaan; aparat penegak
sebagai pengguna laporan keuangan hukum
Nilai Menambahkan kredibilitas laporan keuangan Membuktikan kecurigaan dan/atau tuduhan;
perusahaan menemukan fakta
Sumber bukti Inquiry, observasi, pemeriksaan, dan Peninjauan data keuangan dan non-keuangan
reperformance transaksi akuntansi untuk terperinci, catatan publik, pencarian fakta serta
mendukung asersi laporan keuangan wawancara, termasuk wawancara pihak ketiga
Kecukupan bukti Reasonable assurance untuk akun-akun yang Mencari fakta untuk mendukung atau
material baik secara kuantitatif maupun menyangkal kecurigaan atau tuduhan atas fraud
kualitatif

Session 4
Looking Forward: The Future of Forensic Accounting
Where do We Go from Here?
5 (lima) hal yang menentukan masa depan Forensic Accounting:
1. Evolusi disiplin ilmu itu sendiri, termasuk batasan antara audit

laporan keuangan dan Forensic Accounting
2. Pendidikan dan pelatihan untuk Forensic Accountant
3. Perubahan peraturan hukum yang ada
4. Perubahan lingkungan perusahaan, di mana keputusan untuk
menyelidiki serta memproses hasil penyelidikan selalu dibandingkan
dengan cost & benefit analysis
5. Perubahan dalam proses pelaporan di perusahaan, terutama yang
berkaitan dengan data operasi non-keuangan yang dapat
dimanipulasi

What to Prepare?
 Technology
Dengan semakin berkembangnya teknologi dan modus fraud yang terjadi, maka adaptasi
Forensic Accountant terhadap teknologi baru menjadi kunci kesuksesan profesi ini. Teknologi
baru akan menambah keterampilan yang diperlukan seperti critical analysis hingga
pengetahuan teknis seperti manajemen data, teknik normalisasi dan visualisasi.
 Interpersonal Skill
Kemampuan untuk benar – benar mendengarkan, melakukan analisis berdasarkan data dan
fakta, menafsirkan isyarat non-verbal serta memahami berbagai latar belakang budaya.
 Professional Scepticism
Dengan professional scepticism yang baik, Forensic Accounting Investigator selalu melakukan
verifikasi secara prudent terkait informasi yang didapat untuk mengungkap fakta di lapangan.
Mengembangkan sikap professional scepticism merupakan upaya yang harus dilakukan secara
berkesinambungan dan keterampilan ini perlu untuk terus diterapkan serta diarahkan dengan
pelatihan yang memadai.

What to Prepare? (continued)
 International impact
Keterampilan pemberantasan dan pencegahan korupsi akan menjadi ujian bagi negara – negara
berkembang untuk dinyatakan sebagai "berhasil atau gagal". Pemimpin negara yang memiliki
determinasi kuat untuk melakukan pencegahan fraud dan tindak pidana korupsi akan dibantu
oleh mitra Forensic Accountant yang memiliki kemampuan terbaik. Dengan adanya Kerjasama
yang baik tersebut, maka akan membuka keran investasi, baik lokal maupun internasional.
 Tekanan pada layanan penilaian

Pemodelan keuangan sering kali mengacu pada "penilaian" perusahaan, terutama perusahaan
baru, dan standar penilaian saat ini mengeluarkan pengecualian untuk layanan penilaian yang
diberikan sehubungan dengan litigasi. Profesi mungkin melihat perubahan dalam terminologi,
misalnya, “certified valuation," untuk membedakannya dari penggunaan pasar keuangan sehari
– hari. Selain itu, diperlukan standar berbasis litigasi untuk memungkinkan kesetaraan antara
profesional yang mematuhi standar dan bagi mereka yang memberikan layanan penilaian saat
ini.

Future of Forensic Accounting
Berdasarkan artikel “Forensic Auditing: Three Trends To Watch” oleh Forbes pada Juli 2018. Terdapat 3 (tiga) tren yang
patut menjadi perhatian, yaitu:
1. Artificial Intelligence (AI) akan segera hadir
Dengan kecerdasan buatan, Forensic Accountant dapat meminta komputer untuk membuka email serta dokumen di
mana terdapat kata atau pola tertentu yang muncul untuk membantu mengarahkan ke pemeriksaan yang lebih detil.
Dengan demikian, tidak hanya meningkatkan efisiensi dengan mengurangi waktu investigasi, tetapi juga
meningkatkan efektivitas kualitas hasil audit yang lebih baik.
2. Permintaan klien untuk teknologi digital akan semakin besar

Satu dari empat eksekutif yang disurvei (27%) mencantumkan “informasi real-time terkait risiko signifikan dan
pengendalian internal" sebagai salah satu manfaat terpenting dari perkembangan teknologi terkait dengan
pelaporan keuangan. Dengan kemajuan teknologi yang semakin baik memungkinkan analisis data dilakukan untuk
100% populasi.
3. Persiapan menghadapikasus fraud memainkan perananyang sangat krusial

Penting bagi organisasi dalam menghadapi tantangan dengan hati – hati dan disiplin serta menerapkan solusi yang
tepat. Hal utama yang harus dipastikan adalah Forensic Accountant dan Pengacara tidak memiliki benturan
kepentingan (conflict of interest), sehingga dapat melaksanakan tugasnya dengan baik.
Technology in Forensic Accounting
Optical Character Recognition (OCR)
OCR is the use of technology to distinguish printed or

handwritten text characters inside digital images of physical
documents, such as a scanned paper document.

ACL Desktop Tableau
Qlik View/Qlik Sense

UltraBlock Forensic
EnCase Forensic
Passware Kit Forensic Card Reader
The Forensic Card Reader can be The Gold Standard in Forensic
Passware Kit Forensic is the complete used to read (and optionally write) to Investigations – including Mobile
encrypted electronic evidence the following multimedia card formats: Acquisition. EnCase™
discovery solution that reports and Compact Flash Card (CFC), MicroDrive eDiscovery litigation support
decrypts all password-protected items (MD), Memory Stick Card (MSC), software enables eDiscovery
on a computer. The software Memory Stick Pro (MSP), Memory data collection from diverse
recognizes 280+ file types and works in Stick Pro Duo (MSPD), Smart Media sources including endpoints for
batch mode recovering passwords. xD Media, Secure Digital Card (SDC, litigation and investigations.
SDHC and SDXC), MicroSD,
MultiMedia Card (MMC)
Key Points in Gathering Digital Evidence
Before Forensic Accounting examines any system, Forensic Accounting need to make sure that Forensic
Accounting has permission to examine that system. Forensic Accounting needs to know the legal aspects
of collection, documentation, and preservation of digital evidence.
Below were eight considerations for gathering digital evidence:
 The computer is not a substitute for forensic accounting judgement and experience. It cannot replace
document reviews, interviews and follow up steps.
 If possible, data should be gathered at the outset of engagement and prior to the initial field visit.
 Data obtained should be checked for accuracy and completeness, because incorrect and incompleteness
data set may cause to premature and incorrect conclusions.
 The complexity of the tools used should be commensurate with the size and complexity of engagement.
 Some forensic accounting investigators may place too much reliance on the tool itself.
 Ensure that planned procedures are allowed from a legal perspective and that any evidence gathered
may be used for legal purposes if required.
 Data collection across national boundaries must be done with proper legal advice about the export data
or about the type of data being collected.
 Proper computer forensic techniques must be used to avoid inadvertently altering evidence.

Session 5
Key Takeaways
Financial Statement Fraud – Warning Signs
Growth of
Weakinternal industry doesn’t Companiesunder
controls match with financialpressure
company’s
Complex
Smal fast-growth Background
corporate
structures, useof or highly management
SPV acquisitivefirms raisesquestions
Aggressive
accounting
policies
Source:Antje Seiffert-Murphy, CFA, FCIB Webinar - 24August2017

Audit Procedures to Detect Financial Statement Fraud in General
 Fraud Brainstorming Session
 Journal Entry Testing & Vouching
 Accounting Estimates
 Significant Unusual Transactions

Financial Statement Fraud – How to Detect in Accounts?
Sumber: Antje Seiffert-Murphy, CFA, FCIB Webinar - 24 August 2017

How to Mitigate Fraud with Fraud Risk Management
• Fraud risk can never be eliminated entirely; more effective

organizations employ a risk-based approach to mitigating fraud
risk.
• Fraud risk management is an ongoing and evolutionary process
that changes as the organization and the environment change.
• Regular fraud risk management process evaluation and
measurement assists continuous improvement.
• Fraud risk management is a collaborative effort that involves
everyone within an organization.

Session 6
Q&A?
Day 5
FORENSIC
ACCOUNTING
VS
INVESTIGATIVE
AUDITING
Audit Webinar
IkatanAkuntan Indonesia (IAI)
Bersama anda hari ini…
Vidvant Brahmantyo SE.Ak., CA, CIA, CFE
Partner di RSM Indonesia
Ikatan Akuntan Indonesia (IAI) Forensic Accounting vs Investigative Auditing

Agenda
• 13.00 – 13.05 Opening

• 13.05 – 13.35 Education & Career in Forensic Accounting
• 13.35 – 13.45 Q&A Session 1
• 13.45 – 14.45 Investigation Data & Technique
• 14.45 – 14.55 Q&A Session 2
• 14.55 – 15.45 Case Study
• 15.45 – 15.55 Q&A Session 3
• 15.55 – 16.00 Key Takeaways & Closing

Session 1
Education & Career in Forensic Accounting
Educational Background of Forensic Accountant
Bachelor of the Arts – BA (Hons) Forensic Accounting
Full–time study, 3 years or Part–time study, 6 years
Modules studied:
Year one Year two Year three
 Financial Accounting  Principles of Forensic Accounting  Fraud Examination
 Introductory Management  Management Accounting and  Forensic Accounting and the Expert
Accounting Performance Measurement Witness
 The Business Environment for  Fundamentals of Financial  Global Governance, Risk and Ethics
Accountants Management  Auditing and Assurance
 Business and Corporate Law  Financial reporting  Advanced Financial Reporting
 Statistical Techniques and Data  Financial Crime Investigation  Theory and Practice of Securities
Analysis for Accounting and Finance Trading
 Professional practice and
 Introduction to Finance Employability in Accounting & Finance
Sumber: https://www.southwales.ac.uk/courses/ba-hons-forensic-accounting/

Educational Background of Forensic Accountant (Cont’d)
Forensic Accounting MSc (Master of Science) Full–
time study, 1 year or Part–time study, 30 months
Modules:
 Financial Analysis  Financial Crime & the Law

 Statistics & Data Modelling  Fraud Examination and Forensic
Investigations
 Corporate Governance & Ethics
 Expert Witnessing & Dispute  Dissertation
Resolution  Data Analysis and Visualisation
 Valuations and the Expert Report  Database Design and Implementation
Sumber: https://www.port.ac.uk/study/courses/msc-forensic-accounting

Educational Background of Forensic Accountant (Cont’d)
Center for Forensic Accounting Studies
Pusat studi Akuntansi Forensik yang berada di bawah Program Studi Akuntansi Universitas Islam Indonesia adalah
representasi dari upaya untuk mengembangkan bidang ilmu akuntansi forensik. Upaya ini diwujudkan terutama dalam
bentuk kajian-kajian untuk mengidentifikasi tren permasalahan kecurangan pada saat ini yang akan menjadi dasar
perumusan strategi diantaranya untuk pengembangan SDM di bidang Akuntansi Forensik di Indonesia.
Pusat Studi Akuntansi Forensik ini diharapkan akan dapat memperkenalkan dan mendukung perkembangan Akuntansi
Forensik di Indonesia sebagai salah satu cabang baru ilmu baru Akuntansi. Pusat Studi Akuntansi Forensik juga akan
menjadi sarana untuk menjalin networking antara para akademisi, praktisi, dan pemerhati Akuntansi Forensik baik di
tingkat nasional maupun internasional.
Sumber: https://accounting.uii.ac.id/pusat-studi/cfas/

Professional Certification in Forensic Accounting
Forensic Accountant
Issued by Institute of Certified Forensic Accountant
Syllabus:
 Unit 1 - Introduction to Forensic Accounting
 Unit 2 - The Fraudster
 Unit 3 - Fraud Detecting Techniques
 Unit 4 - Case Investigation Procedure
 Unit 5 - Evidence Gathering
 Unit 6 - Evaluating Financial and Non-Financial Evidence
Professional Certification in Fraud Examiner
Investigative Audit
Issued by Association of Certified Fraud Examiner
Syllabus:
 Legal elements of fraud (Law related to Fraud)
 Fraud Investigation (Investigation Techniques)
 Financial Transactions and Fraud Schemes
 Fraud prevention and Deterrence

Forensic Accountant’s Career
Forensic accountants are in demand all over the world. Thanks to a shortage of people with
relevant specialist skills, graduates from the Forensic Accounting course can expect to be well
paid for their talents. Forensic accountants work for government, accounting firms, banks,
insurance companies, law firms, etc.
Career opportunities include:

 Crime analysis  Charities
 Crime Scene Investigator  Private Industry
 Police Staff Investigator  Financial Investigator Average Annual Salary
 Forensic Scientist/analyst  Compliance Officer US$70,000 – US$90,000
 The court and prison service  Internal Auditor Sumber: www.indeed.com
 Local Authorities  Consultant in Public Accounting Firm

 Academia and researcher  Consultant at Law Firm

Forensic Accountant Salary in Indonesia
Sumber: http://www.salaryexplorer.com/salary-survey.php?loc=101&loctype=1&job=10381&jobtype=3

Session 2
Investigation Data & Technique
Reminder: Internal Auditors Add Value with Prevention and Detection of Fraud
https://youtu.be/hEiZIigQyeI

The Accounting Cycle

Financial Statements
Income Shareholders’ Balance sheet

statement equity
Notes to
Financial
Statement
Statement of
cash flows

Income Statement
Summary of
profitability over a
period of time

Balance Sheet
What organization owns and owes and where funding

for ownership originated, as of a point in time
• Current vs. noncurrent (or long-term)

 Listed from most to least liquid
• Equity
 Investments by owners (contributed capital)
 Undistributed earnings (retained earnings)
 Distributions to owners (dividends)
• Assets – Liabilities = Equity

Statement of Shareholders’ Equity
Provides details of changes in equity

 Capital stock: par value and common,
preferred, and treasury stock
 Additional paid-in capital

 Retained earnings
Retained Earnings, Beginning Balance

+ Net Income [Period Revenue − Period Expenses] − Dividends for Period
= Retained Earnings, Ending Balance

Cash Flow Statements
 Used to reconcile income statement and

balance sheet
 Shows health of the organization

 Cash levels at beginning and end of period
 Net cash flows from operations, investing,
financing

Discussion Question
Identify the financial statement with

its use.
Answers:

 Statement of Cash Flows  Includes primary short-term measure of
Income  success

Includes primary long-term measure

Statement
Balance ofHelps determine financial
Sheet
Statement of
value
Helps form a picture of an
flexibility
shareholders’ equity
organization’s prospects and priorities
Notes to Financial Statements (Disclosures)

Integral part of the financial statements
Contingent liabilities
Subsequent events
 Capital stock disclosures
 Off-balance-sheet
Contractual obligations
Accounting policies
accounting (OBSA)
and valuation methods  Other disclosures: credit

claims, deferred taxes, lease
information, etc.
Change in accounting
policies

Financial Statement Analysis
Horizontal Analysis of
Income Statement

Financial Statement Analysis (Cont’d)
Vertical Analysis of Balance Sheet

Financial Statement Analysis (Cont’d)
 Analytical procedures can detect:

 Differences that aren’t expected.
 Absence of expected differences.
 Potential errors.
 Potential irregularities or illegal acts.
 Other unusual or nonrecurring transactions.
 Include nonfinancial data in analysis.
 Ratios helpful before and during audit.

Determining if Suspected Fraud Merits Investigation
If significant control weaknesses are detected, auditor should:

 Recognize that presence of more than one indicator increases probability that
fraud has occurred.
 Evaluate indicators of fraud and decide whether further action or investigation
is necessary.
 Notify appropriate authorities.
 Support further investigation by providing sound data and ensuring that
suspected perpetrators are not alerted.

Objectives of a Fraud Investigation
 Protect the innocent, establish facts, and resolve the matter.

 Quickly stop loss.
 Support successful prosecution.
 Identify, gather, and protect evidence.
 Identify and interview witnesses.
 Identify behaviour patterns.
 Determine motives and suspects.
 Provide factual basis for discipline, etc.
 Account for and recover assets.
 Identify control weaknesses.
Conducting the Investigation
Create an Obtain Interview and

investigation
plan evidence interrogate
Report Evaluate
investigation Resolve fraud Communicate lessons
results incidents results learned

Practice Question (1)
What should an investigation plan include to ensure that evidence

gathered on potential fraud involving a supplier will be useful?
A. Interrogations are limited to one-on-one discussions.
B. Vendor information should be restricted to internal sources for
verifiability.
C. A knowledgeable purchasing department employee should
conduct the interrogation.
D. In gathering evidence, the legal rules and business uses of the
evidence should be considered.
Answer: D. Investigation plans should provide training on documenting

and preserving evidence to ensure that the evidence is admissible.

Practice Question (2)
A fraud defendant’s lawyer claims that a record could have been

created later than when the prosecution claims it was. What should
exist to disprove this, given proper evidence gathering?
A. Refer to the inventory or log chronology.
B. The second interrogator can act as a witness.
C. Produce the electronic version of the record.
D. Chain-of-custody should exist solely in the computer-assisted
data analysis.
Answer: A. All reports, documents, and evidence obtained should be

recorded chronologically in an inventory or log. Chain-of-custody is not
restricted to computer-assisted data analysis.

Interviewing vs. Interrogating
 Terms are often used interchangeably, but they are not the same; they occur in different
contexts.
 In interviewing, most answers to questions are not known; in interrogation, most answers to
questions are already known.
 Different goals, different techniques to achieve goals.
Interviewing Interrogating
Goals Uncover information. Secure confession, evidence.
Interviewees Suspect, witnesses, victims, those who Will probably focus on suspected
aided perpetrator, providers of perpetrators and accomplices.
background information.
Questioning • Comfort level. • Repetitive to note explanation
strategy • Don’t use word “fraud.” changes.
• Logical and sequential manner for • May change direction suddenly.
questions.
Atmosphere • Cooperative, open tone. • Confrontational at times.
• At interviewee’s workplace. • Neutral ground, free of distractions.
• Low visibility of interview. • Presence of security.
Discussion Question
What are some interview behaviours that

could be considered possible indicators of
fraud?
Sample answers:
 Restlessness  Anxiety
 No eye contact  Attitude change
 Inappropriate attitudes  Changing answers

Interviewing Model
Prepare
• Define goals.
• Gather background
Document information.
• Plan questions, Conduct
• Complete report.
strategies. • Follow plan.
• Don’t transcribe;
summarize. • Verify fact/hearsay.
• Include attitude, next • Take notes.
steps.
Agree
• Summarize key points.
• Confirm/correct
points.

Computer Forensics
 Recovering deleted emails

 Monitoring emails for indicators of potential fraud
 Performing investigations after employment termination
 Recovering evidence after formatting a hard drive

Session 3
Case Study
Financial Shenanigans
Financial Shenanigans
are actions or omissions
designed to hide or
distort the real financial
performance or financial
condition of a company
Main source:
Financial Shenanigans: How to Detect Accounting
Gimmicks & Fraud in Financial Reports, 3rd Edition
– May 5, 2010 by Howard Schilit (Author), Jeremy
Perler (Author)
35
Financial Shenanigans – The
Author
36
Schilit’s Seven Shenanigans
1 – Recordingrevenuetoo soonor of questionablenature
2 – Recording bogus revenue
3 – Boostingincome with one-timegains
4– Shiftingcurrent expenses to alater or earlier period
5 – Failingto recordor improperly reducing liabilities
6 – Shifting current revenue into alaterperiod
7 – Shifting future expensesto the current period asaspecialcharge
37
Shenanigan No:1
Recording revenue too soon


Recording revenue when future
services remain to be provided
Recording revenue before
1
shipment or before the customer’s
unconditional acceptance
 Recording revenue even though
the customer is not obligated to
pay
38
Shenanigan No:1
Recording revenue of
questionable & Inflated
Quality
 Selling to an affiliated party
1
 Giving the customer of something
of value as a quid pro quo
 Grossing up revenue
39
Shenanigan No:1
Recording revenue when future serv ices
remain to be provided – UA
1
Source: https://www.wsj.com/articles/under-armour-is-
subject-of-federal-accounting-probe-11572819835
40
Shenanigan No:1
Recording revenue when future serv ices
remain to be provided – UA
1
Source: https://www.nasdaq.com/market-activity/stocks/ua
41
Shenanigan No:1
Recording revenue when future services
remain to be provided – GIA
1
Source: https://finance.detik.com/bursa-dan-valas/d-4603814/kisruh- Source: https://www.cnnindonesia.com/ekonomi/20190628124946-92-
laporan-keuangan-garuda-ditolak-komisaris-hingga-terbukti-cacat 407304/kemenkeu-beberkan-tiga-kelalaian-auditor-garuda-indonesia
42
Shenanigan No:1
Recording revenue too soon
 WarningSigns
1. Up-frontrevenuerecognitiononlong-term contracts.
2. Cashflowfromoperationlaggingbehindnet income.
1
3. Acceleratingsalesbychangingtherevenue
recognitionpolicy.
4. Seler offeringextremelygenerousextended payment
terms.
Watch for changes to more aggressive revenue

recognitions policies or decisions
43
Shenanigan No. 2:
Recording bogus revenue


Recording revenue from
transaction that lack economic
substance
Recording revenue from
2
transaction that lack a reasonable
arm’s length process.
 Recording revenue on receipt from
non- revenue-producing
transactions.
44
Shenanigan No. 2:
2
Recording revenue on receipt from non-
revenue-producing transactions – Xerox
Source: https://www.washingtonpost.com/archive/business/2002/04/02/xerox-to-pay-sec-10-million-fine-
to-settle-probe/fe101272-50cb-433e-996a-4797a7824d9a/
45
2
Shenanigan No. 2:
Recording revenue on receipt from non-
revenue-producing transactions – Xerox
46
Shenanigan No. 2:
Recording bogus revenue
 WarningSigns
1. Recordingrevenuefromtransactionthatlacka reasonablearm’s
lengthprocess.
2. Recordingcashreceivedfromalender, businesspartner,
2
orvendorasrevenue.
3. Revenuegrowingmuchfasterthanaccountreceivables.
4. Unusualincreasesordecreasesinliability reservesaccount.
When ‘unbilled receivables’ grew substantially

faster than ‘billed receivables’
47
Shenanigan No. 3:
Boosting Income with One-time
gains


Boosting profits by selling
undervalued assets
Boosting profits by retiring debt
3
 Failing to segregate non-recurring
activities
48
Shenanigan No. 3:
gains
 Techniques:
1. Boostingincomeusingone-timeevents.
2. Boostingincomethroughmisleading
3
classifications.
49
3
Shenanigan No. 3:
gains
50
Shenanigan No. 3:
gains
3
Source: https://www.washingtonpost.com/archive/business/1997/10/19/coming-home-to-roost-boston-market-was-
once-a-wall-street-star-but-after-a-series-of-missteps-its-sales-and-stock-price-are-falling-and-investors-are-crying-foul-
51 over-the-restaurant-chains-accounting-tactics/d31ec3fb-516a-4e48-9a9a-b70085448ca8/
Shenanigan No. 3:
gains
 WarningSigns
1. Shiftingnormaloperatingexpensesbelowthe line.
2. Routinelyrecordingrestructuringcharges.
3
3. Includingproceedsreceivedfromseling a subsidiaryas
revenue.
4. Operatingincomegrowingmuchfasterthan sales.
Hid signs of deteriorating business by including

revenue from noncore source of income
52
Shenanigan No. 4:
4
Shifting Current Expenses to
Later Period
 Improperly capitalizing costs
 Depreciating or amortizing
costs too slowly
 Failing to write off worthless
assets
53
Shenanigan No. 4:
Later Period
 Techniques
1. Improperlycapitalizingnormaloperating
expenses.
4
2. Amortizingcosttooslowly.
3. Failingtowritedownassetswithimpaired
value.
4. Failingtorecordexpensesforuncolectible
receivablesanddevaluedinvestments.
5
4
Shenanigan No. 4:
4
Later Period
55
Shenanigan No. 4:
4
Later Period
56 Source: https://money.cnn.com/2000/06/14/companies/cendant/
Shenanigan No. 4:
4
Later Period
 WarningSigns
1. Improperlycapitalizingnormaloperatingexpenses.
2. Changesincapitalizationpolicyoraccelerated capitalization
ofcosts.
3. Neworunusualassetsaccounts.
Watch changes in
4. Jumpinsoftassetsrelativetosale Capitalization Policy
5. Stretchingoutdepreciableassetlife. just before the IPO
6. Improperamortizationofcostassociated
with loans.
57
Shenanigan No. 7:
Shifting Future Expenses to Current
Period


Accelerating discretionary into
the current period
Writing off future years’
7
depreciation and amortization
during the current year
58
Shenanigan No. 7:
Period
 Techniques
1. Improperly writing off assets in the
current period to avoid expensesina
7
futureperiod.
2. Improperly recording charges to
establish reserves used to reduce
futureexpenses.
59
P
Sheernio
andigan No. 7:
7
60
Shenanigan No. 7:
Period
7
6 Source: https://www.marketwatch.com/story/wr-grace-reaches-settlement-with-sec-on-accounting-measures
1
Shenanigan No. 7:
Period
 WarningsSigns
1. Improperly writing off assets in thecurrent
period to avoid expensesin afutureperiod.
7
2. Improperly recording chargesto establish,
reservesusedto reduce future expenses.
3. Largewrite-offs accompanyingthe arrival ofa new
CEO.
Be alert on unusual Write-offs:
1. Account receivables
2. Good will
62
Special CaseStudy:
Duniatex Group &
Hanson
International
Special Case Study:
Duniatex Group
64 Source: https://finansial.bisnis.com/read/20191014/90/1158622/digugat-pkpu-duniatex-dapat-perlindungan-hukum-luar-negeri
Special Case Study:
Duniatex Group
65 Source: https://finansial.bisnis.com/read/20190724/90/1128362/fitch-ratings-kembali-pangkas-peringkat-surat-utang-duniatex
Special Case Study:
Duniatex Group
66 Source: https://www.cnbcindonesia.com/market/20190731110121-17-88815/pinjaman-lpei-ke-duniatex-tembus-rp-3-t-ini-sebarannya
Special Case Study:
Hanson International
67 Source: https://www.cnbcindonesia.com/market/20191030184444-17-111486/himpun-dana-triliunan-hanson-milik-bentjok-dihukum-ojk
Special Case Study:
Hanson International
68 Source: https://katadata.co.id/berita/2019/11/08/diduga-himpun-dana-ilegal-hanson-janji-cicil-kembalikan-uang-investor
Session 4
Key Takeaways
A COSO - Consistent Approach for Fraud Risk Management
•Tone at the top
•Code of Conduct/Ethics • Identify fraud risk
•Whistleblower Hotline factors, fraud risks
Creating and fraudschemes
a Control
Environment
Performing
Monitoring Fraud Risk
Activities Assessments
AFPC
• Monitoring
effectiveness of
antifraud programs Sharing Designing and
and controls Informationand Implementing
Control
Activities
• Effective communication • Link or map
of antifraud programs identified fraud
and controls throughout AFPC: Anti Fraud Programs & risks to control
Controls activities
the Organization
Source: Committee of Sponsoring Organizations of the Treadway Commission, Anti Fraud Program & Controls (AFPC)

Three Lines Model in Fraud Deterrence
Setiap lini memiiki tugas Untuk memastikan keefektifan implementasi Tata Kelola Perusahaan yang baik, organisasi perlu meningkatkan
dan peran berbeda – beda peran dari masing – masing lini pertahanan secara memadai. The Institute of Internal Auditors (IIA)
terkait pencegahan fraud memperbarui Three Lines Model sebagai cara untuk menjelaskan hubungan serta peran antara lini dan
tanggung jawab setiap lini pertahanan di perusahaan.
Accountability,
reporting
Delegation,
direction,
resources,
oversight
Allignment
communication
, coordination,
collaboration

How to Mitigate Fraud with Fraud Risk Management
• Fraud risk can never be eliminated entirely; more effective

organizations employ a risk-based approach to mitigating fraud
risk.
• Fraud risk management is an ongoing and evolutionary process
that changes as the organization and the environment change.
• Regular fraud risk management process evaluation and
measurement assists continuous improvement.
• Fraud risk management is a collaborative effort that involves
everyone within an organization.

Session 5
Q&A?
ENDOF
WEBINAR
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Day 1

Doddy Ashraf Zulma, Director of Forensic Services

Books and Records 55

“Simply put, forensic accounting is legally accurate

Time and scope of work:

Methodology and presumption:

 To audit the financial  To dig out the fraud (4W +

Documentary  “Professional skepticism”  “heightened degree of

• Detail-oriented • Makes people at ease

• Ethical • Team player

• Insightful • FUN PERSONALITY

• Function well under pressure

 Consider the role of a patrolman and a detective

Source: Association of Certified Fraud Examiners (“ACFE”)

Cash Cash on Check and Expense Financial Register

Bank and financial

Manufacturing 177 23% 5% 6% 8% 50% 20% 18% 23% 10% 2% 8%

Energy 89 24% 6% 7% 6% 66% 11% 9% 25% 6% 1% 9%

Insurance 82 24% 2% 5% 9% 43% 16% 11% 9% 5% 2% 6%

Education 82 30% 9% 13% 18% 30% 22% 7% 17% 13% 1% 22%

Technology 63 24% 0% 5% 6% 46% 13% 13% 22% 11% 0% 0%

Telecommunications 62 5% 2% 3% 2% 56% 5% 6% 31% 2% 0% 5%

Low Risk High Risk

Source: 2020 ACFE Report to the Nations

• Financial statement fraud

• “Luckin Coffee debacle is a painful reminder of fraud risk” - CNBC

• When things seem too good to be true, they just might be

• Used off-balance-sheet Specialised Purpose

• Growth does not always equate to profit or success

• Bank Negara Indonesia allegedly fraudulent Letters of

• One of the biggest state-owned enterprise pharmacy

• In 1997, Bank Bali has difficulties to collected its

How was the fraud discovered?

How was the fraud perpetrated?

What has caused this situation

• Management and internal audit failure to detect the frauds

Fraudulent financial reporting Misappropriation of assets

• High degree of competition or market • Known or anticipated future employee

• High turnover rates • Easily convertible assets

or individuals that have controlling interest

person or small group and review of computer systems event

• The owner-manager makes no distinction reducing risks related to misappropriations

Discrepancies in the accounting records Conflicting or missing evidence

Unusual relationships between the auditor

Contrarian trends Procurement and payments

• An objective assessment of an act, omission, situation or event to determine any breach.

• Evidence obtained lawfully.

• What, • How, and

But remember that:

The role of the Investigator

• Responsible for the investigation.

The role of the investigator: Exhaust all avenues of inquiry

* College of Policing (2013) : Investigation process. https://www.app.college.police.uk/app-

The role of the investigator (continued):

The role of the investigator (continued):

The investigator must ensure without fail that they :

The role of the investigator (continued):

In fulfilling their role, the investigator will:

The role of the investigator (continued):

In fulfilling their role, the investigator will:

The role of the investigator (continued):

• Close personal association with the complainant, subject of the allegation.

• Information gathered should only be divulged to others on a ‘need to know’ basis.