a) How what could what auditors normally do be tweaked (e.g. nature, timing or extent) to catch management off guard?
The auditors should assess the company’s environment and market in order to determine whether there is a possibility of the management fraud. The auditors could gather an understanding by investigating the management’s background, look for any factors that signal a motivation for fraud and the management’s influence in making decisions for the organization. (© 2016 Cengage Learning).
If the management is committing fraud, it is most likely concealing its actions in inventory, accounts receivables or expense accounts such as meals and entertainment and consulting. Because of the large size and complex nature of these accounts, it is difficult to determine their proper valuation and makes it easier for the management to manipulate the …show more content…
The auditors could pick random samples from the entertainment and consulting expense accounts and request to see the backup, explanation of expenses and the authorization to approve those expenses to determine the internal controls around those expenses.
In the case of Polycom, the CEO, Andrew Miller reported fraudulent expense reports because he was solely in charge of approving his assistant’s purchase card, and was able to provide his assistants with false descriptions for the items they expensed on his behalf without any oversight. (http://www.gibsondunn.com/publications/Documents/Fagel-SEC-Hits-Hard-on-Executive-Perks-NYSE-2015.pdf ) This weakness in the internal control could be identified and his fraudulent expenses could have been caught if the auditors extended their search beyond normal day to day expenses to the entertainment