Fraud: it’s the five letter word that keeps audit professionals up at night. Despite nearly-constant regulatory reforms, the evolution of technology and improved transparancy, investment frauds continue to riddle financial headlines. Jim Chanos, the short-seller who called Enron’s demise (and notably has recently denied embezzlement claims by his former firm), has even deemed the post-pandemic era as the ‘golden age of fraud’. There is no time like the present to make sure your investment audits are adequately addressing fraud risk.

Join us for this newly developed course where we will review common characteristics in the most notorious investment frauds, identify critical controls to prevent and detect fraud and discuss where and how to incorporate fraud detection into your investment audit programs so you can rest easier.

COURSE FEATURES

• Analyze the most prevelant control lapses and oversights in investment fraud including: breakdowns in risk management controls, gaps in back office operations, lack of segregation of duties, speculation disguised as hedging strategies, lack of system controls, weak compliance systems.
• Learn key red flags to watch for, the most critical controls in the Front, Middle, and Back Offices and the most common reportable audit findings, such as: rogue trader concerns, valuation misstatements, manipulation of reports, counterparty/broker dealer conflicts, and insider trading.
• Review the key policies, processes, and controls to have in place throughout the Front, Middle, and Back Offices to help protect your organization against some of the common denominators of investment frauds.
• Discuss the importance of effective compliance programs and risk management functions to quickly detect potential unauthorized investments and derivatives that may be the work of a rogue trader.

COURSE OUTLINE

Corporate Fraud Overview

• Defining corporate fraud
• Who are the fraudsters?
• Why do they commit fraud?
• What should we look for?
• The Fraud Triangle and ‘Control Fraud’ in Investment Fraud

Overview: Investment Fraud Case Studies

• How the frauds were executed and how they unraveled
• Common denominators and red flags in Investment Fraud
• Were internal controls weak or were they ignored?

Detecting Investment Fraud: What is an Auditor to do?

• Management Oversight
• Market and credit risk management practices
• Liquidity risk management practices
• Operational and compliance controls