Fraudsters, Churches, Economy, and the Expectations Gap: Applying Trends of Occupational Fraud to an Assurance Engagement Team Plan and Fraud-Prevention Client Proposal

The purpose of this thesis is to present an overview of fraud, including concepts, trends, and controls to in turn, develop an effective assurance work plan as well as a fraud-prevention proposal to a potential client. When KPMG collected data from 348 of their company fraud investigations in 2011, an average of 87 percent were male (3). Around thirty-two percent of fraudsters usually worked in a finance role which gave them access to assets and financial statements. According to Donald Cressy’s research, it takes all three elements to be considered fraud: a triangle of motivation, opportunity, and rationalization. However, in the 2004 CPA Journal, David T. Wolfe and Dana R. Hermanson discussed the addition of another element from their research to create a fraud diamond, which also includes the individual’s capacity. Compared to public companies, fraud occurs more frequently in privately owned companies. Nearly 40 percent of victim organizations in the Association of Certified Fraud Examiners’ 2012 study were privately owned while 28 percent were publicly traded. Furthermore, fraud is more likely to be detected by individuals in the internal or external audit setting or an anonymous tipline. These concepts are explained further in sections of the assurance engagement team plan and fraud-prevention proposal to a small business owner