The-Accountant-Jul-Aug-2016

FINANCE AND INVESTMENT
“Remember when
Jacob Zuma once
said, ‘there should
be one vetting
agency to vet
all strategically
–placed civil
servants, those who
reject promotions
even when it comes
with improved
remunerations’’.
By Maroa Julius Mwita, juliusmaroa@gmail.com
EMBRACING LIFE
STYLE AUDIT AS
A TOOL TO CURB
CORRUPTION
Life style audit is a tool commonly
used by forensic auditors and
management in companies
to describe the tests that are
performed to determine if the
lifestyle of an employee is commensurate
with that person’s known income stream.
Life style audit is that technique that was
used by G-men in the 1930s to investigate
and imprison AL CAPONE. Life style
audit is simply an amalgamation of reports
from a variety of databases, which provide
management as well as investigators with a
snap shot of the life of an employee.
We understand that Fraud and Corruption
is usually committed by means of ‘OFF
BOOK ‘’ transactions or manipulated
accounting records. It is very difficult
to detect and dishonestly inclined
professionals are able to conceal their
frauds with disturbing alacrity and ease,
particular in work environments with weak
internal controls or limited segregation of
duty. Sometimes the only clue to the illicit
activities is a sudden unexplained change
in an employee’s lifestyle.
We need to understand that lifestyle
audit alone is not conclusive but is an
indicator or a clue that something may
be amiss but can never, without further
evidence be regarded as conclusive proof
of illicit activity. Some extravagant lifestyle
may be explanatory as some is due to
inheritance, a wealthy partner or family
member providing financial support that
may not be known to the employer.
Therefore, when conducting lifestyle
audit, one needs to approach it with
caution and professionalism as some
employees may have inherited the wealth
but may not explain themselves with ease
due to fear of unknown.
18 JULY - AUGUST 2016