I would really be very happy to state that the double Fs in the heading stand for “Food & Fun” in the fashion of dining & wining. However, those two letters constitute an abbreviation designating less pleasant yet unavoidable phenomena of “Fraud & Forensic.” When it comes to audit and finance, any kind of related professional is destined to witness incidents happen to fall under the scrutiny of fraud or forensic oriented investigation. In this post, I want to review a book on the subject written by Tommie & Aaron Singleton and named as “Fraud Audit and Forensic Accounting” (Wiley, 2010.) I am of the opinion that it is a very good resource and reference book concerning the mentioned issues thus I wish my review to be a summary to be opened up through reading by the interested pupils of the subject, like I did.

Any kind of fraud leads to an investigation, scaled and tailored in line with the financial and organizational scope of the incident. Singletons begin their book by providing 6 basic steps in the fraud investigation which are:

•  

  Acquire all available details and documents relating to the allegation.

•  

  Assess the allegation against the available documentation.

•  

  Assess the corporate environment relative to the person in question.

•  

  Ask whether a theory of fraud can be developed at this stage. Is there motive and opportunity?

•  

  Determine whether the available evidence makes sense. Does it meet the test of business reality?

•  

  Communicate with appropriate parties on the details and status of the fraud.

Then, they explain the differences in between forensic accountants, fraud auditors, and investigative auditors with respect to their peculiar perspectives as regards measurement, and assessment of the financial transactions in relation to Criminal Code, insurance contracts, institutional policies, or other guidelines. They put forward the most vital questions necessary for fraud auditors concerning the accounting system and internal control system of the organization. To get the right answers one should ask the right questions. I think these are the indispensable questions for any kind of fraud audit engagement:

•  

  Where are the weakest links in this system’s chain of controls?

•  

  What deviations from conventional good accounting practices are possible in this system?

•  

  How are off-line transactions handled, and who can authorize such transactions?

•  

  What would be the simplest way to compromise this system?

•  

  What control features in this system can be bypassed by higher authorities?

•  

  What is the nature of the work environment?

At this juncture, they cite the main principles of fraud audits of which I find the two principles cited below very important since they underline the specific nature of fraud audit that differentiates it from audit in the general sense:

•  

  “Fraud auditing is learned primarily from experience, not from audit textbooks or last year’s work papers. Learning to be a fraud auditor means learning to think like a thief: ‘‘Where are the weakest links in this chain of internal controls?’’ ‘‘How can I steal on my job and get away with it?’’

•  

  “From an audit perspective, fraud is intentionally misrepresenting financial facts of a material nature. From a fraud-audit perspective, fraud is an intentional misrepresentation of material financial facts.”

I hereby try to unwrap certain aspects of the book with the aim of giving a general idea about its precious content, in a nutshell. I honestly recommend this book to anyone interested in the subject. Besides, how people fall into the fraud triangle and how the fraud auditors map the territory within that triangle provide good reading, regardless of professional orientation.