Fraud Examination
Definition
The process of resolving an allegation of fraud, from initial fact-finding through evidence collection to a conclusion about what happened and who was responsible. It is a major subset of forensic accounting.
Related terms
- Forensic Accounting
- The application of accounting, auditing, and investigative skills to matters likely to be disputed in a legal or regulatory forum. The word...
- Asset Misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Forensic Audit
- An examination of an organisation's financial records and systems conducted specifically to gather evidence for legal proceedings. Distinguished from a regular audit...
- Fraud Triangle
- A model, developed by criminologist Donald Cressey, proposing that occupational fraud requires three converging conditions: pressure (financial need or incentive), opportunity (a...
- Litigation Support
- Work done by a forensic accountant to assist counsel in civil or commercial disputes: calculating damages, modelling lost profits, or reviewing opposing...
- Net-Worth Method
- An indirect method of proving unreported income. The investigator establishes opening and closing net worth, adds known expenditures, subtracts documented income, and...
- Predication
- The reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a...
- Sarbanes-Oxley Act (SOX)
- US federal legislation enacted in July 2002 in direct response to Enron and WorldCom. Its key provisions include CEO/CFO certification of financial...
- Treadway Commission (COSO)
- The Committee of Sponsoring Organizations of the Treadway Commission, whose 1992 Internal Control framework became the global baseline for evaluating internal controls...
Explained in these topics
- Forensic Auditing: Definition and ScopeThe process, defined by the ACFE, of resolving allegations of fraud from initial predication through evidence collection, interviewing, and reporting. Forensic...
- Scope and History of Forensic AccountingThe process of resolving an allegation of fraud, from initial fact-finding through evidence collection to a conclusion about what happened and who was responsi...