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Uploaded byAshwini Singh
Lifestyle Audits Explained: A Complete Guide to Detecting Hidden Income, Assets & Red Flags
Unlock the essentials of Lifestyle Auditing with this clear, practical introduction. This presentation breaks down why lifestyle audits matter, how they reveal hidden red flags, and the proven methods investigators use to detect undisclosed income, concealed assets, and sudden lifestyle changes. Whether you’re a compliance officer, forensic investigator, auditor, or simply curious about financial accountability, this guide offers a step-by-step overview of tools like the Net Worth Method, Cash-T Method, and Source & Application of Funds Method. Learn how to: Spot spending patterns that don’t align with declared income Identify assets, liabilities, and income sources with precision Recognize common concealment tactics such as offshore transfers or asset shifting Apply lifestyle auditing techniques in both corporate and government contexts With lifestyle audits now compulsory in many sectors, this presentation is a must-watch for professionals in fraud detection, governance, and risk management. 👉 Perfect for training, academic study, or professional development, this SlideShare will help you understand not just the “what” but the “how” of lifestyle auditing.
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Lifestyle Audits Explained: A Complete Guide to Detecting Hidden Income, Assets & Red Flags
- 1.
- 2. Lifestyle Audit Attempting todetermine if the lifestyle of an employee is consistent with their known income.
- 3. Why conduct a lifestyleaudit?
- 4. It is auseful tool for identifying: Spending patterns & red flags Living beyond known income Sudden (lavish) lifestyle changes
- 5. Some lifestyle changesinclude: Gambling/betting habits School fees Brand- name/designer goods Bond/loan repayments Travel
- 6. Some lifestyle changesinclude: Luxury vehicles Jewellery Acquisition of property Improvements upon property Stock purchases
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- 10. Common Liabilities Loans Credit Cards Bills &Accounts Payable Instalment Purchases
- 11. Common Income Sources •Salary • Gifts • Dividends • Inheritance
- 12.
- 13. The Net WorthMethod Calculates the difference between a subject’s assets & liabilities over a period. Used when subject has few assets & evidence of income is available.
- 14. The Net WorthMethod Assists in making circumstantial determination of concealed income that may require further investigation. Change in Net Worth for Period + Living Expenses for Period = Funds Required for Period (Net Worth = All Assets – All Liabilities)
- 15. The Cash-T Method Compares cashreceived with cash spent. If received cash exceeds spent cash, that could indicate undisclosed income.
- 16. The Cash-T Method Cashreceived is on the Debit side of T-account. Cash spent is on the Credit side of T-account.
- 17. Source & Application of FundsMethod Theorises that outflow of funds exceeding inflow of funds indicates undisclosed income.
- 18. Source & Applicationof Funds Method Inflow of funds are Sources. Outflow of funds are Applications.
- 19. Source & Applicationof Funds Method Sources (Inflow of Funds) • Profits from trading • Sales of assets • Dividends • Salary Applications (Outflow of Funds) • Loss of funds from trading • Purchase of assets • Purchase of investments • Business expenses
- 20. Common Methods ofHiding Assets Transferring assets to family or other affiliated persons; Transferring assets to trust; Repaying bond or credit card accounts; Transferring assets offshore.
- 21. Lifestyle audits compulsory forgovernment departments from 01 April 2021.
- 22.
- 23. Sources of Information •CIPC • Deeds Office / Windeed • Credit Bureaus (ie. Experian, TransUnion) • SARS VAT Vendor Search: https://secure.sarsefiling.co.za/vatvendorsearch.aspx • Banks (per subpoena) • Social Media / News Sites + Search Engines • Master of the High Court (for Trust Deed)
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