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Fraud Detection and Control

Employs fraud prevention & detection techniques and procedures, in reducing the risk of fraud and identifying potential fraudsters. Knowledge of the appropriate procedures for identifying, reporting, and preventing fraud.
Level 1 Introductory: Demonstrates introductory understanding and ability and, with guidance, applies the competency in a few, simple situations. Can direct people to the appropriate source for further information.

BEHAVIORS

  • Discusses basic fraud preventive measures & fraud detection techniques.
  • Recognizes simple fraud indicators (signs that indicate the potential for fraud or fraudulent activity).
  • Promptly escalates to relevant authorities, depending on the perceived severity of the observed fraud indicators.
  • Describes the necessary steps for preventing fraud.
  • Identifies management responsibility for preventing fraud.

QUESTIONS

  • Tell me about a time when you recognized a potentially fraudulent situation.

Probing Questions

* What was the potential fraud?

* What signs indicated to you that there might be a potential fraud?

* What did you do with that information?

* What was the result?

  • Tell me about one action you have taken that you consider would prevent fraud.

Probing Questions

* How do you think that action prevented a fraud?

* Who is responsible for preventing fraud?

* Did your action actually prevent a fraud?

Level 2 Basic: Demonstrates basic knowledge and ability and, with guidance, can apply the competency in common situations that present limited difficulties.

BEHAVIORS

  • Keeps up to date with fraud trends especially as it relates to technology.
  • Identifies conditions that are conducive to fraudulent activity (fraud risk factors).
  • Implements fraud preventive procedures for various organizational units/departments, making reference to documented procedural manuals.
  • Explains the appropriate procedures for fraud investigations and internal audits as they relate to detecting and reporting of fraudulent behavior.
  • Illustrates the legal and ethical responsibilities as they relate to fraud.
  • Assesses the effectiveness of the fraud prevention tools in place in the organization.

QUESTIONS

  • Describe a time when you assessed fraud prevention procedures and discovered a potential weakness.

Probing Questions

* What was a potential weakness?

* What else did you do to look for compensating controls?

* How did you relate the information to management?

* What was the result?

  • Tell me about your efforts to keep up-to-date in respect of fraud trends.

Probing Questions

* What sources did you use?

* How did you apply this knowledge to your work environment?

* How do you ensure that your knowledge is current?

Level 3 Intermediate: Demonstrates solid knowledge and ability, and can apply the competency, with minimal or no guidance, in the full range of typical situations. Would require guidance to handle novel or more complex situations.

BEHAVIORS

  • Describes fraud prevention best practices as well as industry standards for fraud prevention and control techniques.
  • Assesses the adequacy or otherwise of internal control procedures, under supervision.
  • Monitors and investigates data and records for indications of fraud or potentially fraudulent activity.
  • Communicates fraud control awareness to all employees and stakeholders.
  • Implements fraud control and risk assessment activities in a timely manner.
  • Evaluates the likelihood and significance of each fraud risk factor.
  • Tests the effectiveness of the company’s fraud prevention program.

QUESTIONS

  • Describe a time when you were required to communicate fraud control awareness to non-financial managers and staff.

Probing Questions

* Who was your audience?

* How did you decide what information to communicate?

* How did you handle questions and challenges?

* What was the result?

  • Tell me about a time when you detected a significant fraud control weakness.

Probing Questions

* What was the weakness?

* How did you detect it?

* What were your next steps?

* What was the result?

Level 4 Advanced: Demonstrates advanced knowledge and ability and can apply the competency in new or complex situations. Guides other professionals.

BEHAVIORS

  • Analyzes and uses relevant management information to identify initiatives to mitigate fraud losses.
  • Assesses the possible risks for financial statement misstatement, new products or services, or other unusual transactions and suggests recommendations to mitigate them.
  • Coaches other audit & non-audit personnel on practical Fraud Detection & Control techniques.
  • Evaluates the organization’s internal control environment over fraud risk factors and identifies material weaknesses in internal controls and prescribes corrective actions.
  • Plays a key role in the development and implementation of fraud control strategies for the entire organization.
  • Assesses the fraud risk management system developed by the company.
  • Assesses fraud risk factors at the company’s level, business unit and significant account level.

QUESTIONS

  • Describe your experience with potential financial statement misrepresentation.

Probing Questions

* What were the situations that you were involved with?

* How did you identify the potential for fraud?

* What did you do with that information?

* What was the result?

Level 5 Expert: Demonstrates expert knowledge and ability, and can apply the competency in the most complex situations. Develops new approaches, methods or policies in the area. Is recognized as an expert, internally and/or externally.

BEHAVIORS

  • Analyzes current laws and regulations to maintain appropriate financial practices.
  • Develops the ‘end-to-end’ fraud detection & control strategy.
  • Builds security (and attendant controls) into processes and procedures required for new product rollout.
  • Contributes to the development (and subsequent implementation) of industry-wide fraud prevention & control initiatives, techniques and procedures.
  • Drafts corporate policies, procedures and supporting internal controls targeted at proactive fraud prevention, detection and control.
  • Provides expert consultation to resolve complex fraud detection and control cases.
  • Follows corporate standards with respect to ethics in business dealings and reporting.

QUESTIONS

  • Tell me about a time when you demonstrated corporate ethical standards.

Probing Questions

* What was the circumstance?

* How did you demonstrate corporate ethics in that situation?

* What impact did your actions have on others involved? Were your actions effective in communicating corporate ethics to observers?

  • Describe a time when you were involved in drafting new or revised corporate policies on fraud detection and control.

Probing Questions

* What was the new or revised policy?

* What was driving the requirement for a new or revised policy?

* What consultations did you perform and what resources did you use?

* Was the new or revised policy implemented?