Fraud Risk
Agenda – Supporting questions (Management Inquiries)
Valeo Pharma Inc.
Year ended October 31, 2019
Date November 20, 2019
Attendees Ben Simo, Controller
AGENDA:
Questions
(The following are example questions
that could be addressed to the CEO,
CFO, and Financial Controller, and
Response
other management depending upon
the structure of the entity).
a) Questions to gain an understanding
of historical frauds perpetrated and
the commitment of the management
regarding fraud prevention,
deterrence and detection.
Do you have any knowledge of any fraud
perpetrated or alleged or suspected that
could result in a material misstatement of
the entity's financial statements?
Do you have any knowledge of any other
fraud, regardless of materiality,
perpetrated or any alleged or suspected
fraud?
Have you received any letters or
communications from employees, former
employees, analysts, short sellers or
others concerning allegations of fraud?
For a new client: In the past, what kinds
of frauds have been committed against the
entity by employees or executives,
including defalcations and employee
thefts?
What incentives and pressures do you
perceive to be on management and how
are the related fraud risks managed?
Where fraud or potential fraud is
identified, how is the matter investigated
and remediated?
In the past, what kinds of frauds have ben
committed against the entity by
employees or exeutivies, including
defalcations and employee thefts? Do you
have any knowledge of any fraud
perpetrated or alleged or suspected that
could result in a material misstatement of
the entity’s financial statements?
Fraud Risk
Agenda – Supporting questions (Management Inquiries)
Questions
(The following are example questions
that could be addressed to the CEO,
CFO, and Financial Controller, and
Response
other management depending upon
the structure of the entity).
b) Questions to gain an understanding
of management’s fraud risk
assessment and related controls.
What is your understanding about the
risks of fraud in the entity, including any
specific fraud risks the entity has
identified or any account balances or
classes of transactions for which a risk of
fraud may be more likely to exist, and
why?
(If the respondent indicates that they have
identified any specific fraud risks or any
account balances or classes of
transactions for which a risk of fraud may
be more likely to exist) What programmes
and controls has management established
to mitigate specific fraud risks that have
been identified?
How does management monitor
those programmes or controls? (see
guidance on assessing management’s
anti-fraud programs and controls in
PwC Audit 4309.7);
(If the respondent indicates that they have
not identified any specific fraud risks or
any account balances or classes of
transactions for which a risk of fraud may
be more likely to exist). What programs
and controls has management established
to otherwise help to prevent, deter and
detect fraud?
How does management monitor
those programmes or controls? (see
guidance on assessing management’s
anti-fraud programs and controls in
PwC Audit 4309.7);
Has anyone asked you or others within
the entity to withhold information from
us, alter documents, or make fictitious
entries in the books?
Are you aware of any inappropriate or
unusual activity relating to the processing
of journal entries and other adjustments?
Fraud Risk
Agenda – Supporting questions (Management Inquiries)
c) Questions to gain an understanding
about how management
communicates its commitment
regarding the prevention,
deterrence and detection of fraud.
How does management communicate its
views on business practices and ethical
behaviour?
Have you reported to the Audit Committee
or others with equivalent authority and
responsibility on the entity's internal
control and how management believes
internal control serves to prevent, deter, or
detect material misstatements due to
fraud?
How does management demonstrate
behaviour consistent with their views?
d) Questions to gain an understanding
about how management monitors
operating locations or business
segments.
What procedures are in place to monitor
the controls and programmes at operating
locations or business segments that are
designed to prevent, deter or detect fraud?
Are there any particular subsidiary
locations or business segments for which a
risk of fraud is more likely to exist?
How have those charged with governance's
views on fraud and control procedures
been communicated to you and other
senior management?
What procedures are in place to review the
results of operating locations or business
segments to identify unusual or
unexpected results which could indicate
potential fraudulent manipulation
e) Questions about tips or complaints
regarding the company’s financial
reporting.
Have you received any tips or complaints
regarding the company’s financial
reporting (including through the
whistleblower program)?
If so, how have you responded to
such tips?
Note: When addressing questions to gain an understanding of management’s fraud risk assessment
and related controls, team should consider the linkage with assessment of internal control
components.
