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NCJ Number: 66358 Find in a Library
Title: STRENGTHENING FRAUD DETECTION - THE DCAA (DEFENSE CONTRACT AUDIT AGENCY) VIEW
Journal: INTERNAL AUDITOR  Volume:37  Issue:2  Dated:( APRIL 1980)  Pages:23-29
Author(s): J A NOCERA; J W LOVELACE
Corporate Author: Institute of Internal Auditors, Inc
United States of America
Date Published: 1980
Page Count: 7
Sponsoring Agency: Institute of Internal Auditors, Inc
Altamonte Springs, FL 32701
Format: Article
Language: English
Country: United States of America
Annotation: BASED ON EXPERIENCES OF THE DEFENSE CONTRACT AUDIT AGENCY (DCAA), MEASURES THAT ALL AUDITORS SHOULD CONSIDER TO IMPROVE FRAUD DETECTION ARE EXAMINED.
Abstract: ALTHOUGH FRAUD CASES INVOLVING DEFENSE CONTRACTS ARE RARE, DCAA HAS DISCOVERED ABUSES THROUGH REGULAR AUDITS AND REPORTS FROM OUTSIDE SOURCES. CONGRESS, FEDERAL AGENCIES, AND PROFESSIONAL AUDITORS ARE CONCERNED WITH IMPROVING INTERNAL CONTROLS TO DETECT AND DISCOURAGE FRAUD, AS EVIDENCED IN THE FOREIGN CORRUPT PRACTICES ACT AND PUBLIC LAW 95-452. INTERNAL AUDITING CONTROLS ARE PARTICULARLY IMPORTANT WHERE AUTOMATIC DATA PROCESSING IS EMPLOYED. MANY DCAA CASES INVOLVED MISCHARGED LABOR COSTS WHICH CANNOT BE DETECTED UNLESS INTERNAL CONTROLS ARE INSTANTANEOUS AND RIGID. SINCE DCAA CANNOT EXAMINE EVERY TRANSACTION OF CONTRACTORS, IT MUST DEPEND ON EVALUATIONS OF THEIR INTERNAL CONTROL SYSTEMS AND MONITOR ACTIVITIES WHEN WEAKNESSES ARE DISCOVERED. LARGE COMPANIES SHOULD ESTABLISH A PERMANENT INTERNAL CONTROL AUDIT STAFF BEFORE A SUBSTANTIAL FRAUD OCCURS. AUDITORS ALSO NEED TRAINING IN AREAS OF FRAUD DETECTION, SUCH AS UNUSUAL TRANSACTIONS, CONCEALED PAYMENTS, CONSULTANTS' FEES, AND COMPANY HISTORIES. INTERNAL CONTROLS AND DETECTION TRAINING ARE USELESS UNLESS AN EFFECTIVE REPORTING SYSTEM EXISTS. THE PROFESSION MUST INSIST THAT INTERNAL AND EXTERNAL AUDITORS BE PERMITTED TO ISSUE INDEPENDENT REPORTS WITHOUT FEAR OF CENSURE OR REPRISAL.
Index Term(s): Computer crime prevention measures; Federal regulations; Fraud; Government contracting; White collar crime
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=66358

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