If you’re familiar with the process of a financial statement audit, you know all about audit work programs. They’re basically the checklists and guides that auditors use to make sure they follow all the required steps for auditing the financial statements. Because these audits are fairly standardized, the work programs ensure that all critical work is completed, all important questions have been answered, and all key concerns are documented.
In contrast, fraud investigators have very little that resembles work programs or investigation guides. Each investigation is unique, which makes it difficult to create a one-size-fits-all approach to performing the engagement. Fraud investigators are more likely to rely on some basic checklists to guide the engagement in general, with specific investigation procedures being developed and performed as the engagement progresses.
Because there are fewer guides for fraud investigators, less experienced staff members probably need closer supervision than regular auditors. While a young auditor can refer to the prior year’s audit work papers and work programs to guide her or him through the process, the young investigator is not so lucky.
Unless you’ve worked in a traditional auditing role, it may be difficult to comprehend just how heavily staff relies on the work programs and the prior year’s work papers. Quite simply, probably 85% to 90% of the auditor’s work will be done in accordance with them. The remaining 10% to 15% of the work will be based on situations that arise during the audit, such as new company functions or accounting processes, problems found during testing of accounts, new accounting or auditing standards, and new procedures designed to address new risks identified.
Relevant checklists to assist in fraud investigations are developed over time as a fraud investigator gains more experience in the field. The checklists will vary depending on whether the firm works on specific types of cases or in specific industries. There is no one-size-fits-all set of checklists that will help fraud investigators across the board because of the varying types of cases.