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It’s all in the details
Task 2 of the INAC assessment has the lowest percentage of students achieving the required competency level in the exam. The chief examiner has identified several areas that typically cause problems – and they are not particularly technical
Words Gill Myers, Evolve
Task focus: the risk of fraud and how to prevent and detect it
In order to be successful, it is important to understand what the task is assessing. You will be asked to evaluate internal control systems, specifically in the context of preventing and detecting fraud and systemic weaknesses. You will also have to evaluate an organisation’s accounting system and underpinning procedures, specifically with respect to the risk of fraud.
Feedback from the chief examiner
The focus of the task is clearly on fraud. However, this does not mean that you should write everything you know about fraud, or speculate about complex potential fraud situations that have not been included in the scenario and would be unlikely, or even impossible, in practice. You should be aware that if an element of the accounting system is not described in the scenario, it is safe to assume that it functions properly, as opposed to seeing it as a potentially problematic area.
The chief examiner has stated that not all of the weaknesses in the accounting system described will necessarily give rise to potential fraud. You should bear this in mind when you read the scenario information so that you can identify which weaknesses in the system have a fraud connection and which do not.
Reading and correctly interpreting the questions is the first step to writing answers that will be awarded as many marks as possible. The questions are not intended to be complex, yet simple examples of potential fraud that have been clearly described in the scenario are often not mentioned when answering them. There is also evidence that questions are not read properly, as ones about purchasing systems are answered with references to sales and customers, and vice versa.
How to give the examiner what they want
Weaknesses
For example, you may be asked to identify a given number of weaknesses, which could include unauthorised access to a warehouse. However, simply stating this is unlikely to gain any marks. Instead, you should identify who, within the scenario, has unauthorised access. Perhaps it is staff or members of the public. The more specific you can be, in terms of naming which person or people are involved, the better.
Internal controls
You could then be asked to recommend an internal control for each of the weaknesses you have identified. These will be one of the eight listed in the unit’s specification and can be remembered by the acronym SOAPSPAM:
While it is obvious to say that the control must be related to the weakness, it is worth noting that, again, marks will only be awarded to answers that are specific and linked to the scenario. Saying that ‘physical controls are needed to address the weaknesses of unauthorised access’ is not enough. A credit-worthy answer would state that locks or keypads on doors are required to ensure that only staff with keys or codes have access to the warehouse, or, if the issue is to do with members of the public, perhaps not leaving them unattended would be appropriate.
Prevention or circumstances of fraud
Remember, the focus on task 2 is fraud, so questions will include an element of that, perhaps giving a reason why your suggested control will prevent fraud. Again, marks will be awarded for specifics – for example, controlling access to the warehouse will prevent the theft and/or damage of inventory. If the reason is only worth one mark, your answer doesn’t need to be more complicated.
However, it is a good idea to look at the mark allocation, as it can vary. If you have been asked to identify the circumstances in which fraud is occurring, four marks could be available. So, if missing inventory is a problem in the scenario, and deliveries are left at the warehouse door and not checked or recorded at the time, this should be included in your answer. However, it would not be enough for four marks. You would need to look for more in the scenario. Maybe purchase order numbers are not used and orders are placed over the phone. This could give rise to staff placing personal orders as no pre-order authorisation is needed and they will be able to collect the goods from the warehouse door before the delivery is recorded.
It is important to be aware that you will only be awarded marks for a point and/or justification once, so you need to make sure that you do not repeat yourself within an answer. Try to choose a problem that can be easily explained, which links logically to an internal control and might realistically occur in terms of fraud. You don’t necessarily have to write about the fraud triangle to apply it!
KEY TAKEAWAYS
While INAC’s assessment is challenging, the chief examiner says that “there is lots of evidence of excellent responses from students, scoring full marks within the tasks logically and coherently and making full use of the scenario in their answers”. Their report is available on the learning portal and has lots of useful task-by-task information that will help with your exam preparation. Take the time to read the pre-released reference material (specifically for the live assessment) carefully and, for task 2 in particular, identify the weaknesses that relate to fraud so you can provide specific and detailed answers to maximise the number of marks you are awarded.
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