Fraud red flags
Warning signs that fraud may be happening.
Examples include an employee who never takes leave, unexplained lifestyle changes, vendors with no physical address, missing documents, and unusual journal entries near period-end. A red flag is a reason to look closer, not proof.
On the exam
When auditors spot red flags, they evaluate them and notify the right people under the organisation’s policy; they don’t accuse or run an investigation alone.
Related terms
- Fraud trianglePressure, opportunity and rationalisation.
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