Red flags are systems or indications of situations of Fraud. A red flag is a signal and a set of circumstances that are something unusual in nature. During the statutory audit of a branch of public sector bank, auditors

Red Flags and Green Flags: Red flags are symptoms or indicators of fraud, white collar crime or something detrimental to the interest of the organization. A red flag is a set of circumstances that are unusual in nature or vary from the normal activity. It is a signal that something is out of the ordinary and may need to be investigated further. To the contrary there are other signals which could also imply the existence of fraud but do not activate alarm bells. Rather they may even lead to a greater sense of assurance and comfort in a scenario which may be potentially infused with fraud. These signals are referred as 'green flags'. The instance of Green Flags could be helpful in identifying are unusual signs or inconsistencies, but apparently harmless or perhaps even helpful. In all the following cases, flags indicated are: Branch Manager and joint-custodians (JCs) of cash hardly had any leave during the year - Red Flag Branch Manager and JCs arrives always early and goes late and works till late evening. - Green Flag No cash shortages have been shown on any day, while excess cash has been shown on few days. - Green Flag They are in practice of submitting the TA Bills, after several months and making out of pocket expenses. - Green Flag They have been reluctant to provide the required information to the auditors and have been never cooperative to produce the required records timely. - Red Flag They have been disputing on audit issues. - Red Flag Non-compliance of regulatory inspection reports persisting since long and had no respect to regulations and bank's policies/ procedures. - Red Flag