Trainer’s Guide 1

TG 03b: Proactive Guide

Lesson Facilitation

Brief
Slide 1 - 2 Designing the Fraud Detection Procedures

Enumerate the procedures that the participants must keep in mind in designing
the detection procedures:
 Detection procedures must address all KFRs.
 Detection procedures are done together with general substantive
procedures
 A single procedure might address more than one risk

In slide 2, we would like to emphasize to the participants that in designing the

detection procedures it must a combination of our initial assessment of the FRA
and the assessment of the internal controls of the agency.

Slide 3 Sample Detection Procedures

Show the diagram of the sample detection procedures that COA Auditors may
use in finding for red flags/fraud symptoms.

Slide 4 – 7 Data Analytics

Slide 4, describes the definition of the Data Analytics. Main purpose of Data
Analytics is to filter out for electronic data evidence that may show symptoms
of red flags/fraud indicators. In performing Data Analytics, the audit team
should be using Computer Assisted Auditing Tools such as IDEA® and ACL®.
Emphasize that Data Analytics may be used for Agencies that are highly
automated.

Slides 5 to 7, provides examples where we could use Data Analytics and what
type of test we could execute.

Slides 8 Third Party Confirmation

Explain the concept of 3rd party confirmation and emphasize to the participants
that proper confirmations, such as those enumerated in the slides, are needed
in order to get quality results of our Detection Procedures. Highlight to them
that in reality, some of the procedures that COA Auditors are conducting may
also be Detection Procedures, we just have to replace the objectives of those
procedures, which instead of looking for audit assertions, we look for red
flags/symptoms of fraud.
 Trainer’s Guide 2
TG 03b: Proactive Guide

Slide 9 – 10 Social Networking Analysis

The succeeding slides actually explain the description of the Social Network
Analysis and its’ use for linking possible relationship of person who might
commit the Fraud. This is a useful graphical tool that will enable the auditor to
find out the possible persons who may commit the fraud and test the area
(process) where the person is highly involved.

Slide 11 & 13 Executing the Detection Procedures

In slide 11, we provide the participants tips on how to properly execute the
detection procedures. Right after we have designed the procedures we should
proper request for the documents needed and the documents should be
prepared at once when we request for it, then we should remind the
participants that look for unusual details on the documents and not only look at
the amounts recorded in the documents. Also COA Auditors should incorporate
an element of unpredictability in the execution of the procedures order to
minimized possible alteration of documents to be reviewed.

Slide 13 provides a sample of plan detection procedures and also incorporates

the summary were we cross refer our findings are working papers
documentations.

Slide 12 & 14 Reporting Findings

In slide 12, we emphasize to the participants the need to document the findings
we have found. The description in the slide 12 is actually lifted in the RRSA of
COA auditors, wherein we still use the AOM in recording the findings, but we
will now be using a new template for reporting findings, the sample template is
in Slide 14.

Slide 16 Case Study

In Slide16. We ask the group to get their answer in the first case study, the KFRs
CS
CS that were identified. From the KFRs, we prepare and design possible fraud
detection procedures in order to identify the red flags, if possible, also provide
the red flags/fraud symptoms.