Selection

ACCA - F1   ACCOUNTANT  IN  BUSINESS

Selection is the process of choosing the successful applicant.

Selection process follows standard order of operation:

Ø  Preparing for selection: Selection involves deciding members of selection panel, training for members on equal opportunities selection, designing selection procedures/programs, shortlisting, communicating, following reference and writing offer to successful candidate.

Ø  Equal opportunities in selection: The selection procedure should adopt anti-discrimination approach against sex, age, religion, race and disabilities, and provide equal opportunities to all applicants.

Ø  The selection panel - The panel should be set up at the beginning of the selection process and ideally the same group of people should follow through from shortlisting to interviewing to decision-making to appointment. This is very important to ensure consistency and fairness as well as effectiveness and efficiency.

Ø  Shortlisting: Criteria under job description and person specification are matched with applicant's (application form and CV) information and small number of candidate from the applicant's population is selected for written and oral examinations. Shortlisted candidates should be provided with information regarding date, time and place of interview.

Ø  Selection method - Selection method involves assessment and interview. The tests carried out reveal intelligence, proficiency, aptitude, psychometric, medical state, psychological and personality of candidate appearing in assessment and interview.

o   Assessment -Candidates are assessed in many different ways. They are group discussion, written test, role play exercise, self-appraisal, peer rating speeches, games, simulations, questionnaires and presentations.

o   Interviewing -Interview aids to assessment process. Interviews are more reliable and effective when the interviewers have had training and preparation for their task and when the interviews are well planned and structured. The different type of interview in practice are face to face, group interview, succession of interviews, problem solving, panel interview and stress (aggressive) interview.

Ø  Making decision - After completion of selection method panel should make first list choice and second list choice and inform management about the choice and process involved.

Ø  Letter of offer - Successful candidate is informed verbally followed up with letter of appointment offering him/her the position.

Staff Selection and Interviewing

ACCA Article: Equal opportunities

Recruitment

ACCA - F1   ACCOUNTANT  IN  BUSINESS

Recruitment is the process of seeking applicants for a job vacancy.

Recruitment process follows an organised order:

Ø  Preparing for recruitment: At this stage, organisations recognise the gap, which creates the demand for more employees, associated cost of employees and expected changes in culture and process.

Ø  Equal opportunities: It increases awareness against every type of discriminations that may arise during recruitment process. Prospective candidates should be treated equally and should be provided with reasonable and fair opportunities participating recruitment program.

Ø  Developing a recruitment and selection policy: Policies are developed to formalize process providing guidelines on operation, recognise best practice and promote clarity of vision. It promotes consistent and fair approach in recruitment practice.

Ø  Delegating responsibility for the process of recruitment: The recruitment and selection team is charged with responsibility and delegated with powers to conduct in the best interest of the organisation following the procedures designed for recruitment and selection.

Ø  Planning the process of recruitment: Planning process identifies and describes tasks to complete by the due date.

Ø  Job description/specification: Job description is a summary of the tasks and responsibilities, which make up the job. It is the description of the job and not the person doing it. It includes job title, area of work, terms and conditions of employment and responsibility to employer.

Ø  Person specification: The person specification lists the skills, experience, qualifications and other attributes needed to fulfill the role outlined in the job description.

Job and person specification is better presented by Rodger '-The seven-point plan' (Physical make up -health and physique, Attainments -qualification and experience, General intelligence -fundamental capacity, Special aptitude -other skills, Interest, Disposition -influence over other and self-reliance, Circumstance -domestic/family environment) and Fraser -'Five point plan' (Impact on other people -physical make up, Acquired qualifications -education and experience, Innate abilities -aptitude for learning, Motivation -individual consistency and determination, Flexibility and adjustment -emotional stability).

Ø  Application forms: Application form is prepared in such a way to ensure that all essential information from the candidate is gathered.

Ø  Job advertisements: Advertisement inform potential candidate about available vacancy.

Ø  Information to applicants: It includes details provided in advertisement about the job, organisation and application process.

The Staff Recruitment Process

Job description and Person specification

Fraud Part2

ACCA - F1   ACCOUNTANT  IN  BUSINESS

Why do people commit fraud?: There is no single reason behind fraud and any explanation of it needs to take account of various factors. Three aspects of fraud triangle defines the cause to commit fraud. Motivation (is driven by greed or need - behaviour and culture influences affects the likelihood of fraud), Opportunity (weak control increases chance for fraud - fear of exposure to detection curb propensity of fraudulent behaviour) and rationalization (awareness and acceptance of consequences - e.g justifiable punishment if caught). Page 14

Responsibility for internal control: Overall responsibility for the organisation's system of internal control must be at the highest level in the organisation. (Primary responsibility of prevention and detection of fraud rests with the directors of a company).  A sound system of internal control safeguards shareholders' investment and company's assets. Page 26

Fraud detection: Fraud detection is the identification of actual or potential fraud within an organisation. It relies upon the implementation of appropriate systems and processes to spot the early warning signs of fraud. There are various ways to detect fraud. They are Whistleblowing, internal tip-off, accidental detection, external tip-off, law enforcement investigation, changes in duties/personnel, internal audit, external audit, corporate security and risk management.   Page 38

Whistleblowing policy: Whistleblowing is when a worker reports suspected wrongdoing at work. Officially, this is called ‘making a disclosure in the public interest’. A worker can report things that aren’t right, are illegal or if anyone at work is neglecting their duties, including:

Ø  someone’s health and safety is in danger

Ø  damage to the environment

Ø  a criminal offence

Ø  the company isn’t obeying the law (like not having the right insurance)

Ø  covering up wrongdoing

Pre-employment screening is the process of verifying the qualifications, suitability and experience of a potential candidate for employment. Techniques used include confirmation of educational and professional qualifications, verification of employment background, criminal history searches, and credit checks. For all screening, the organisation must obtain the individual's written permission and all documents must bear the individual's name. Page 36

Outline fraud response plan: Responsibility of detection of fraud normally rest to top level management. Once the likelihood of fraud is identified, the investigation is carried out. Corporate policy and practice provides guidelines for reporting and enforcing actions against fraud. Effective control mechanism is then developed, implemented and reviewed to control fraud.  Page 69

CIMA Article: Fraud risk management -Page 69-38-36-26-14

An introduction to fraud detection

Fraud Part1

ACCA - F1   ACCOUNTANT  IN  BUSINESS

Fraud is a general term for deliberate misrepresentation and it includes money laundering as well.

Money laundering is the funneling of cash or other funds generated from illegal activities through legitimate financial institutions and business to conceal the source of the funds. Anti-Money Laundering, 2^nd ed. IFAC, 2004

Fraud is an intentional act involving the use of deception to obtain an unjust or illegal advantage. Unlike fraud, errors are unintentional mistakes (innocent misrepresentations).

Different types of fraud:

Ø  Telemarketing fraud: E.g. "free gift", "high-profit, no-risk - offer"

Ø   "419" Fraud: E.g. Nigerian letter frauds

Ø  Identity theft: fraudster use others identity to perform a fraud or criminal act.

Ø  Advance fee schemes: E.g. "finder's fee", lottery winnings, found money

Ø  Health care/insurance fraud: E.g. "Rolling Lab" schemes, Medicare fraud

Ø  Redemption/ strawman /bond fraud: use of fraudulent financial documents that appear to be legitimate. E.g. "bills of exchange", "indemnity bonds", "sight draft"

Ø  Letter of credit fraud: E.g. con artists offer "letter of credit" or "bank guarantee" as an investment

Ø  Prime bank note fraud: E.g. con artist refer to the "guarantees" as being issued by world's prime bank.

Ø  Ponzi Schemes: promise high financial returns or dividends (collection from newer victims of the fraud is paid to earlier victims)

Ø  Pyramid Schemes: also known as franchise fraud or chain referral scheme (victims themselves are induced to recruit further victims through the payment of recruitment commission)

Ø  Market manipulation or "Pump and Dump" fraud: E.g. inflating securities price by artificial trading and dumping securities in the inflated market.

Common types of internal fraud (Page9/58):

Ø  Asset misappropriation

o   Cash - E.g. taking money from petty cash, cheque fraud, over-billing customers

o   Non-cash - E.g. theft of inventory, confidential information, altering purchase order

Ø  Fraudulent statement

o   Financial - recording fictitious sales and shipping, overstating/fictitious assets

o   Non-financial - false employee credentials/documents (qualification and references)

Ø  Corruption

o   Conflicts of interest - personal interest, hiring closely related less qualified parties

o   Bribery and extortion - extortion (offering to keep subject away from harm in exchange for money or other consideration), blackmail (offering to keep information confidential in exchange for money or other consideration)

Common Fraud Schemes

CIMA Article: Fraud risk management -Page 58-9