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Fraud Risk in Governmental and Not-for-Profit Organizations

Fraud Risk in Governmental and Not-for-Profit Organizations

Lynda Dennis

ISBN: 978-1-119-50908-0

Feb 2018

144 pages

$67.99

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Chapter 1 Introduction 1-1

Overview 1-2

Introduction 1-3

General Warning Signs of Fraud 1-4

Ways to Prevent, Detect, or Deter Fraud 1-6

Summary 1-9

Practice Questions 1-10

Chapter 2 The Governmental and Not-for-Profit Environments 2-1

Unique Characteristics of the Governmental Environment 2-2

Governmental Organizations 2-3

Unique Characteristics of the Not-for-Profit Environment 2-6

Governmental Financial Reporting Objectives and Users 2-10

Not-for-Profit Financial Reporting Objectives and Users 2-12

Summary 2-14

Practice Questions 2-15

Chapter 3 The Auditor’s Consideration of Fraud in a Financial Statement Audit 3-1

Auditor Responsibilities and Marketplace Expectations 3-2

Fraud Risk Factors in Governmental and Not-for-Profit Entities 3-4

Fraud and the Auditor: An Overview 3-9

The Auditor’s Responsibilities Related to Fraud 3-11

Application of AU-C Section 240 to Audits of Governmental and Not-for-Profit Entities 3-13

Summary 3-16

Practice Questions 3-17

Chapter 4 Where Fraud Occurs in Governmental and Not-for-Profit Organizations 4-1

Where Fraud Occurs 4-2

Where Fraud Occurs in Governmental Organizations 4-3

Where Fraud Occurs in Not-for-Profit Entities 4-5

Fraud Risks in Governmental and Not-for-Profit Entities 4-9

Management Override 4-13

Planning Considerations in Audits of Governmental and Not-for-Profit Entities 4-16

Summary 4-17

Practice Questions 4-18

Chapter 5 Fraud Schemes Found in Governmental and Not-for-Profit Organizations 5-1

Fraudulent Financial Reporting Schemes 5-2

Fraudulent Financial Reporting Revenue Recognition 5-4

Fraudulent Financial Reporting Functional and Fund Classifications 5-12

Misappropriation of Assets Overview 5-15

Misappropriation of Assets Common Fraud Schemes 5-18

Misappropriation of Assets Common Fraud Schemes Procurement and Contracting 5-19

Misappropriation of Assets Common Fraud Schemes Cash Receipts and Fraudulent

Disbursements 5-22

Misappropriation of Assets Common Fraud Schemes Personnel Costs 5-25

Misappropriation of Assets Common Fraud Schemes Property, Plant, and Equipment 5-28

Misappropriation of Assets Common Fraud Schemes Diversion of Program Benefits and Assets 5-32

Summary 5-35

Practice Questions 5-36

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 2

Chapter 3 Solutions 4

Chapter 4 Solutions 5

Chapter 5 Solutions 7

Users of this course material are encouraged to visit the AICPA website at

www.aicpa.org/CPESupplements to access supplemental learning material reflecting

recent developments that may be applicable to this course. The AICPA anticipates

that supplemental materials will be made available on a quarterly basis.