COSO:Internal Control -

Integrated Framework

1. Control Environment2. Risk Assessment3. Control Activities4. Information &

Communications5. Monitoring

Red Flags

Six Categories of Red Flags

Auditors Look For:

1. Unexplained accounting anomalies

2. Exploited internal controls weaknesses

3. Identified analytical anomalies

4. Observed extravagant lifestyle

5. Observed unusual behaviors

6. Anomalies communicated via tips and complaints.

Withholding information

Unexpected fee arrangements

Unauthorized Vendors

Business w Personal Friends

Missing Documentation

Unusual requests/ instructions

Illogical business case

Parallel Systems

Unwillingness to relinquish control

Six Categories of Red Flags

Auditors Look For:

1. Unexplained accounting anomalies

2. Exploited internal controls weaknesses

3. Identified analytical anomalies

4. Observed extravagant lifestyle

5. Observed unusual behaviors

6. Anomalies communicated via tips and complaints.