Audit Red Flags - Navigating Financial, Behavioral, and Control Risks in Auditing

Author: Kelen Camehl

This course covers the key red flags auditors should watch for during audits. It explores risks in financial reporting, revenue recognition, internal controls, and compliance. The course helps auditors identify warning signs of potential fraud, misstatements, and issues like weak internal controls or suspicious audit evidence. It also addresses red flags in management behavior, cybersecurity, and going concern evaluations.

Publication Date: March 2025

Topics Covered

• Red Flags in Financial and Revenue Reporting
• Behavioral and Management Red Flags
• Red Flags in Internal Controls and Audit Evidence
• Red Flags in Compliance and Going Concern

Learning Objectives

• Identify red flags in financial statements that suggest potential misstatements or fraud
• Recognize common issues in revenue recognition practices that could indicate improper reporting
• Recognize how to distinguish between normal financial reporting practices and warning signs of manipulation
• Recognize behavioral red flags that may indicate fraudulent or unethical conduct
• Identify management-related risks in estimates and representations that could affect audit outcomes
• Determine when changes in management behavior require further investigation
• Identify weaknesses in internal controls that may expose the organization to risk
• Identify the appropriate response when suspicious or incomplete audit evidence is found
• Recognize how to distinguish between valid and questionable audit evidence during the audit process
• Recognize red flags in compliance audits that suggest potential violations or regulatory risks
• Identify cybersecurity risks and indicators of inadequate protection measures
• Determine when going concern issues require further assessment or disclosure

Level
Overview

Instructional Method
Self-Study

NASBA Field of Study
Auditing (4 hours)

Program Prerequisites
None

Advance Preparation
None