Finance and Credit

Risk-based internal audit in the system of signs and causes of fraud identification

Vol. 24, Iss. 4, APRIL 2018

Received: 9 January 2018

Received in revised form: 26 February 2018

Accepted: 12 March 2018

Available online: 28 April 2018

Subject Heading: Financial control

JEL Classification: D80, D81, D89, M21, М42

Pages: 755—766

Smetanko A.V. Institute of Economics and Management of V.I. Vernadsky Сrimean Federal University, Simferopol, Republic of Crimea, Russian Federation

Kulyakina E.L. Institute of Economics and Management of V.I. Vernadsky Сrimean Federal University, Simferopol, Republic of Crimea, Russian Federation

Importance The article considers a set of theoretical and methodological issues related to procedures for identification of risks of fraud by internal auditors in the system of corporate management.
Objectives The aim is to develop methodological tools to build a knowledge system with regard to signs of fraud identification and management of risks arising in the course of financial and business operations.
Methods We employ various techniques and methods, namely, the bibliographic method, systems approach, generalization and specification of methods and techniques in the identification of risks of fraud arising in the corporate management system.
Results The paper discloses the general approach to identifying signs of fraud and its causes from the position of risk-based internal audit. As part of the study, the Fraud Triangle Concept of Donald Cressey is modified according to the specifics of risk-based internal audit. This enabled to perform additional classification of types of fraud based on certain criteria and show reasons for fraud occurrence.
Conclusions and Relevance To establish causes of fraud in the system of corporate management, the internal auditor should determine the relationship between elements of fraud identification and assess (rank) possible consequences of fraud for the entire organization.

Keywords: audit, risk-based audit, fraud


  1. Guttsait E.M. [Methodological problems of audit]. Auditorskie vedomosti = Audit Journal, 2002, no. 1, pp. 10–19. (In Russ.)
  2. Kharisova F.I., Rakhmanova I.I. [Some questions of fraud audit operations on transfer pricing]. Audit i finansovyi analiz = Audit and Financial Analysis, 2014, no. 2, pp. 183–188. (In Russ.)
  3. Eliseev S.V. [Employee fraud: Major schemes and practices to combat]. Ekonomicheskaya bezopasnost': kvalifikatsiya i rassledovanie, 2009, no. 7, pp. 22–30. (In Russ.)
  4. Smetanko A.V. [Improving the process of identification and response by the internal audit service]. Ekonomіchnii chasopis-XXІ, 2014, no. 11-12, pp. 135–139. (In Russ.)
  5. Smetanko A.V. [Improvement of the internal audit process of fraud identification in the system of joint-stock companies corporate management]. Ekonomіchnii chasopis-XXІ, 2015, no. 9-10, pp. 107–110. (In Russ.)
  6. Borisov V.A. “Kriminal'nyi audit” protiv moshennichestva sredi personala kompanii ['Criminal audit' against fraud among company personnel]. URL: (In Russ.)
  7. Kogdenko V.G. [Corporate fraud: Asset misappropriation schemes analysis and ways to manipulate reporting]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2015, no. 4, pp. 2–13. URL: (In Russ.)
  8. Ionova O.M. [The role of external and internal audit in the fight against fraud and corruption]. Ekonomika i upravlenie: problemy, resheniya = Economics and Management: Problems, Solutions, 2014, no. 3, pp. 36–41. (In Russ.)
  9. Sotnikova L.V. Moshennichestvo s finansovoi otchetnost'yu: vyyavlenie i preduprezhdenie: monografiya [Fraud in financial reporting: Identification and prevention]. Moscow, Bukhgalterskii uchet Publ., 2011, 208 p.
  10. Efimov S.V. [Efficiency of counteraction to corporate fraud]. Auditorskie vedomosti = Audit Journal, 2009, no. 7, pp. 59–63. (In Russ.)
  11. Rossolovskii A. [Fraudulent financial reporting]. Konsul'tant, 2010, no. 1. (In Russ.) URL:
  12. Demin V. [Corporate fraud: Some practical recommendations for securities services to counteract this as-old-as-the-hills phenomenon]. Bezopasnost'. Dostovernost'. Informatsiya = Security. Reliability. Information, 2007, no. 72, pp. 6–10. (In Russ.)
  13. Borisova E.N. [Fraudulent financial reporting]. Fundamental'nye issledovaniya = Fundamental Research, 2015, no. 2-19, pp. 4235–4238. (In Russ.)
  14. Vona L.W. Fraud Risk Assessment: Building a Fraud Audit Program. Wiley, 2008, 224 p.
  15. Shegurova V.P., Truntaeva Yu.V. [Internal audit in the enterprise management system]. Molodoi uchenyi = Young Scientist, 2013, no. 5, pp. 424–427. (In Russ.)
  16. Kovacich G.L. Protivodeistvie moshennichestvu: kak razrabotat' i realizovat' programmu meropriyatii [Fighting Fraud: How to Establish and Manage an Anti-fraud Program]. Moscow, Maroseika Publ., 2010, 312 p.

View all articles of issue


ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 24, Iss. 7
July 2018