Innovation Tactics

·     Back casting: start from a desired future and work backwards.
·     Body storming: Physical scenario modeling.
·     Brain writing: write ideas down quickly rather than say them
·    Claims Analysis: looking at scope of effect of changes in an existing component on other areas
·    Concept Interviews: Users write down statement to do with the use of a product, and rank them.
·   Consistency Inspection: Like QA, but for product consistency across a product experience.
·     Free listing: a complement to brainstorming where people list examples in relation to a particular question
·     Future Workshop: four phase futures technique (preparatory, critique, fantasy, and implementation phases
·     Laddering Questions: ’5 Whys’ and other methods
·     Metaphor Brainstorming: guiding brainstorming by framing with metaphors
·     Misuse Scenarios: looking for situations for unintentional (accidental) and intentional (e.g. malicious) misuse.
·     Perspective Based Inspection: review from a specific perspective
·     Repeated Card Sorting: sorting cards repeatedly in order to find out the underlying characteristics.
·     Reverse Brainstorming: asking a question that generates problems or criticisms rather than solutions.
·     Reverse Card Sorting: a variation of closed card sorting where you measure users’ cards sorts against a proposed solution.
·   Teach back: Testing the robustness of a mental model by having an expert  explain to a novice and the novice ‘teach it back’.
·    The User Interface Race: challenging users to compete to complete tasks under time pressure
·    The User/Task Matrix: plotting task frequency against groups
·    Yes, And: Taking from improvisation to further ideas.

Risk Assessment Approach

Day-Off Musings

v  Why are they called stairs inside but steps outside?

v  Why is there a light in the fridge but not in the freezer?

v  Why does mineral water that has trickled through mountains for centuries have a use by date?

v  Who was the first person to look at a cow and say "I think i'll squeeze these dangly things here and drink what comes out"?

v  What do people in China call their good plates?

v  If you cross Bulldog with Shitzu, will you get Bullshit?

v  If the professor on Gilligan's Island can make a radio out of a coconut, why can't he fix a hole in a boat?

v  What do you call male ballerinas?

v  Why a person who handles money is called a broker? 

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Types of Audit Evidence

§  Physical evidence

§  Third-party representations

§  Documentary evidence

§  Computations

§  Data Interrelationships

§  Client representations

§  Accounting records

Inherent Risk Factors

(1)    Nature of activities (complexity)

(2)    Regulatory nature

(3)    Degree of estimates

(4)    Competency and training of those reporting the financial statements

(5)    Previous history with entity

(6)    Preliminary analysis testing ( req'd by SAS in planning)…indicates areas where misstatements occur

Scope of Corporate Governance

Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals.

The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.

The aim is to align as nearly as possible the interest of individuals, corporations and society.

The foundation of any structure of corporate governance is disclosure. Openness is the basis of public confidence in the corporate system and funds will flow to centers of economic activity that inspire trust.”  

                                

   J  Sir Adrian Cadbury

Dilbert on Pandemic & Disaster Recovery

Catalog Possible Fraud Symptoms

• Analytical anomalies

• Document or record symptoms

• Internal control symptoms

• Lifestyle symptoms

• Behavioral symptoms

• Tips and complaints

Seinfeld Accountant

Why Fraud Left Undiscovered?

·         Limited time

–      Our most precious resource is our attention

·         History

–      Heavy use of sampling - lack of detail

–      Lack of historical fraud detection instruction

·         Lack of fraud symptom expertise

·         Lack of fraud-specific tools

·         Lack of analysis skills

·         Lack of expertise in technology

·         Auditors do find 20-30 percent of fraud

from  ACFE 2004 Report to the Nation

Feel Marvelous and Fabulous!

• Breathe deeply using your stomach
• Find new things in your life and see their beauty
• When you smile, you feel great, no matter what
• Focus on your strengths
• Stand up straight; not easy when you look at monitor or papers all day
• Watch what you think; make sure it is positive
• Seek friendly and energetic friends
• Be a good animal first, getting enough exercise and proper nutrition
• Find things about yourself that you are proud of
• Try keeping a journal; there is magic when you write things down
• Volunteer where you feel you can make contribution or learn something new

Audit Report Writing Rules

ü  Always avoid alliteration.

ü  Prepositions are not words to end sentences with.

ü  Avoid clichés like the plague.

ü  Employ the vernacular.

ü  Eschew ampersands & abbreviations, etc.

ü  Parenthetical remarks (however relevant) are unnecessary.

ü  It is wrong to ever split an infinitive.

ü  Contractions aren't necessary.

ü  Foreign words and phrases are not apropos.

ü  One should never generalize.

ü  Comparisons are as bad as clichés.

ü  Don't be redundant and don't use more words than necessary because it's highly superfluous.

ü  Profanity sucks.

ü  Be more or less specific.

ü  Understatement is always best.

ü  Exaggeration is a billion times worse than understatement.

ü  One-word sentences? Eliminate.

ü  Analogies in writing are like feathers on a snake.

ü  The passive voice is to be avoided.

ü  Go around the barn at high noon to avoid colloquialisms.

ü  Even if a mixed metaphor sings, it should be derailed.

ü  Who needs rhetorical questions?

ü  Sentences without verbs--bad idea.

ü  Avoid run-on sentences they are hard to read.

ü  Don't use no double negatives

ü  Verbs has to agree with their subjects.

ü  Avoid commas that are not necessary.

ü  Place pronouns as close as possible, especially in long sentences--such as those of ten or more words--to their antecedents.

ü  Use parallel structure when you write and in speaking.

ü  Take the bull in hand and don't mix metaphors.

ü  Never use a long word when a diminutive one will do.

ü  Unless you are quoting other people's exclamations, kill all exclamation points!!!

ü  Proofread carefully to see if you any words out.

Computer-Challenged Questions

      Are you still looking for the “Any Key”?

Are your passwords on a sticky note on your monitor?

Do the blinking ads compel you to click?

Do you anxiously open every attachment in your email?

Do you believe the IT people have magical powers?

Do you believe that the Firefox is the 1982 movie about a really cool jet?

Do you call the thing above the key 8 a snowflake?

Do you not believe in a firewall?

Do you proclaim, out loud, your three year old knows more about computers than you do?

Do you really think you win something for being the 421,232th visitor?

Do you still the think the Apple iPad is a fad?

Do you think you can get a free iPhone for filling out your zip code?

Have you paid for any Geek Squad services?

Is Netscape 4.7 your default browser?

Is your home network’s name “linksys”?

When someone asks what’s wrong with your computer, do you respond with, “It’s running slow”?

When someone is explaining something technical, do you dismiss it as “computer talk”?

FBI's List of Most Common Frauds

·         Telemarketing Fraud

·         Nigerian Letter or “419” Fraud

·         Identity Theft

·         Advance Fee Schemes

·         Health Care Fraud or Health Insurance Fraud

·         Redemption / Strawman / Bond Fraud

·         Letter of Credit Fraud

·         Prime Bank Note Fraud

·         “Ponzi’ Schemes

·         Pyramid Schemes

·         Market Manipulation or “Pump and Dump” Fraud

http://www.fbi.gov/scams-safety/fraud

Testing Designer Shades

Internet Wisdom

§  A chat has nine lives.

§  A journey of a thousand sites begins with a single click.

§  A user and his leisure time are soon parted.

§  C:\ is the root of all directories.

§  Don't byte off more than you can view.

§  Don't put all your hypes in one home page.

§  Fax is stranger than fiction.

§  Great groups from little icons grow.

§  Home is where you hang your @

§  In Gates we trust.

§  Know what to expect before you connect.

§  Oh, what a tangled website we weave when first we practice.

§  Pentium wise; pen and paper foolish

§  Speak softly and carry a cellular phone.

§  Speed thrills.

§  The E-mail of the species is more deadly than the mail.

§  There's no place like http://www.home.com.

§  Too many clicks spoil the browse.

§  Virtual reality is its own reward.

§  What boots up must come down.

§  Windows will never cease.

§  You can't teach a new mouse old clicks.

Effective IT Control in Action

Strategies for Auditors

1.     If your auditee is in range, so are you.

2.     Incoming audit evidence has the right of way.

3.     Don't look conspicuous: it draws defensive attention from management.

4.     The easy finding is already known.

5.     Try to look unimportant; they may be not in mood to criticize you.

6.     Professionals are predictable; it's the amateurs that are dangerous.

7.     The management argues against your audit findings only (a) when you're ready for them and (b) when you're not ready for them.

8.     Audit teamwork is essential; it prevents management from dividing and conquering.

9.     If you can't remember details, they will dispute your audit findings.

10.  If your substantive testing is going well, you have walked into an ambush.

11.  Don't attract criticism; it irritates the people around you.

12.  When you made a mistake, Mr. Audit Report is not your friend.

13.  If it's a stupid procedure but works, it isn't so stupid.

14.  When in doubt, add more details.

15.  Anything you do can get you shot down, including doing nothing.

16.  Mistakes are equal opportunity weapons.

17.  A Purple Heart just proves that were you smart enough to think of a plan, stupid enough to try it, and lucky enough to survive--just like some audits.

18.  (Empty number, left on purpose.)

19.  Don't ever be the first, don't ever be the last, and don't ever volunteer to do anything--you'll make partner soon.

20.  It is generally inadvisable to send your resume to company you just audit slammed. 

Risk Management Strategy

Carnival Game Fraud

1. The Milk Bottle Pyramid - Bottom pins can be filled with lead, making them as heavy as 10 pounds each. The softballs you throw may be filled with cork to make them lighter than regulation balls. And the bottles may be stacked against a backdrop curtain that helps prevent them from falling.

2. The Basketball Shoot - rims may be smaller than normal and oval-shaped, not round, and may be positioned higher than regulation to prevent a score other than with a difficult high-arching swish. Balls are overinflated to make them super-bouncy.

3. The Balloon Dart Throw - Balloons are underinflated to deflect even well-thrown carnival darts, which are often lighter than store-bought types. Their tips may be dulled or broken off.

4. The Ring Toss - The rings are just a hair wider than the neck of the target bottle or spike and are made of hard plastic to facilitate extra bouncing.

5. Tubs of Fun - farming baskets have been replaced with plastic "muck" buckets from home improvement stores so that the ball gets extra bounce.

6. Shoot the Star - the provided ammo is smaller than traditional BBs and in short supply. Plus the rifle's sights may be tampered with and its air pressure reduced so that many shots simply bounce off the target paper, 

7. The Duck Pond - The ruse is to get you to keep playing for the better prize,

Letterman's Top 10 Signs Bad Bank

Ø  Manager giggles whenever he says, “early withdrawal”

Ø  They made $2 million loan to the Hillary Clinton campaign

Ø  Most banks are backed by the FDIC; your bank is backed by KFC

Ø  Bank robbers leave with a sack of IOUs — that’s how bad things are, ladies and gentlemen

Ø  Loan officer will approve your mortgage only if you let him rub you

Ø  ATM looks suspiciously like a Ms. Pac-Man machine

Ø  Interest paid not in money, but in Saltines

Ø  They promise they’ll have your money if you come back after tonight’s Keno drawing

Ø  Instead of Andrew Jackson, their $20 bills have a picture of Tito Jackson

Missionaries Turned Bank Auditors

The OECD Principles of Corporate Governance

The code provides a framework for efficient and transparent running of listed companies to enhance shareholder value. The regulators need to be vigilant to enforce the code in its true spirit.

• Protect rights of shareholders
• Recognize the rights of shareholders
• The Role of Stakeholders in Corporate Governance
• Key Ownership Functions
• Timely and accurate disclosures
• Responsibilities of the Board of Directors

Hackers Tactics

o   Access to classified, proprietary, technology data

o   Assault on an employee

o   Blackmail

o   Bomb/Terrorism

o   Break-ins

o   Browsing of proprietary information

o   Computer abuse

o   Computer crime (e.g., cyber stalking)

o   Denial of service

o   Economic exploitation

o   Equipment failures

o   Fraud and theft

o   Fraud scheme

o   Fraudulent act-replay, impersonation, interception

o   Hacking

o   Information bribery

o   Information theft

o   Information warfare

o   Input of falsified, corrupted data

o   Interception

o   Intrusion on personal privacy

o   Malicious codes

o   Multiple Actions

o   Sale of personal information

o   Social engineering

o   Spoofing

o   System attack

o   System bugs

o   System intrusion, break-ins

o   System penetration

o   System sabotage

o   System tampering

o   Unauthorized access

o   Unauthorized acts combination

o   Viruses

Information RELIABILITY attributes

ü  Believability

ü  Objectivity

ü  Reliability of Compliance Reporting

ü  Reliability of Compliance Reporting

ü  Reliability of Financial Reporting

ü  Reliability of Financial Reporting

ü  Reputation