FOR2601
ASSIGNMENT 1
SEMESTER 1 2026
DUE APRIL 2026
FOR2601 ASSIGNMENT 1 SEMESTER 1 2026
DUE APRIL 2026
Question 1
, 1.1 Discuss in your own words the detection techniques that can be used by auditors
to detect fraud in an organisation.
According to the study guide, auditors can employ several techniques to detect fraud, which
can be categorised as process controls and proactive fraud detection procedures. Process
controls are specifically designed to detect fraudulent activity and include methods such as
reconciliations, independent reviews, physical inspections and counts, and detailed analyses
(Chapter 3, p. 63). These are standard checks that can highlight discrepancies.
Proactive fraud detection procedures involve the use of more advanced techniques like data
analytics. Data analytics, also referred to as data mining or digital analysis, involves the use
of technology to identify anomalies, trends, and risk indicators within large volumes of
transactional data . This can help auditors uncover hidden relationships between people,
organisations, or events, and identify suspicious transactions that might otherwise go
unnoticed. A key part of this is continuous auditing, which is the use of data analytics on a
continuous or real-time basis, allowing for the rapid identification and reporting of fraudulent
activity (Chapter 3, p.
64).
Auditors are trained to recognise "red flags," which are indicators of a potential problem.
These red flags can be behavioural (e.g., an employee living beyond their means),
transactional e.g., unusual payments to tax havens, or systemic e.g., audit logs being turned
off) (Chapter 3, p. 51-52). The use of anonymous reporting mechanisms, such as whistle-
blower hotlines, also serves as a crucial detection technique by providing a channel for
employees to report suspected wrongdoing.
1.2 Discuss the basic considerations or tactical steps you have to consider when
starting a new investigation.
When starting a new investigation, a forensic investigator should use a structured tactical
approach, often beginning with the "five-questions rule," which serves as a basis for
determining the tactical steps needed.nThe first and most crucial step is to determine what
has happened. This involves ascertaining whether a law has been broken (a criminal
offence), whether it is a civil matter, or a disciplinary transgression (Chapter 1, p. 9).
Once the nature of the issue is understood, the investigator must determine what assistance
they may need. This involves evaluating whether they have the necessary legal powers to
ASSIGNMENT 1
SEMESTER 1 2026
DUE APRIL 2026
FOR2601 ASSIGNMENT 1 SEMESTER 1 2026
DUE APRIL 2026
Question 1
, 1.1 Discuss in your own words the detection techniques that can be used by auditors
to detect fraud in an organisation.
According to the study guide, auditors can employ several techniques to detect fraud, which
can be categorised as process controls and proactive fraud detection procedures. Process
controls are specifically designed to detect fraudulent activity and include methods such as
reconciliations, independent reviews, physical inspections and counts, and detailed analyses
(Chapter 3, p. 63). These are standard checks that can highlight discrepancies.
Proactive fraud detection procedures involve the use of more advanced techniques like data
analytics. Data analytics, also referred to as data mining or digital analysis, involves the use
of technology to identify anomalies, trends, and risk indicators within large volumes of
transactional data . This can help auditors uncover hidden relationships between people,
organisations, or events, and identify suspicious transactions that might otherwise go
unnoticed. A key part of this is continuous auditing, which is the use of data analytics on a
continuous or real-time basis, allowing for the rapid identification and reporting of fraudulent
activity (Chapter 3, p.
64).
Auditors are trained to recognise "red flags," which are indicators of a potential problem.
These red flags can be behavioural (e.g., an employee living beyond their means),
transactional e.g., unusual payments to tax havens, or systemic e.g., audit logs being turned
off) (Chapter 3, p. 51-52). The use of anonymous reporting mechanisms, such as whistle-
blower hotlines, also serves as a crucial detection technique by providing a channel for
employees to report suspected wrongdoing.
1.2 Discuss the basic considerations or tactical steps you have to consider when
starting a new investigation.
When starting a new investigation, a forensic investigator should use a structured tactical
approach, often beginning with the "five-questions rule," which serves as a basis for
determining the tactical steps needed.nThe first and most crucial step is to determine what
has happened. This involves ascertaining whether a law has been broken (a criminal
offence), whether it is a civil matter, or a disciplinary transgression (Chapter 1, p. 9).
Once the nature of the issue is understood, the investigator must determine what assistance
they may need. This involves evaluating whether they have the necessary legal powers to
