<ul><li>FRAUD RISK ASSESSMENT </li></ul><ul><li>JANUARY 11, 2012 </li></ul>
FRAUD RISK ASSESSMENT   <ul><li>Objective :  To obtain a general understanding of Fraud Risk factors to consider for 2012 ...
Fraud Risk Assessment 3 Levels: <ul><li>Enterprise-wide risk assessment (Today’s discussion) </li></ul><ul><ul><li>Types o...
Fraud Triangle
Types of Fraud Schemes <ul><li>Asset misappropriation (most common) </li></ul><ul><ul><li>Embezzlement of funds </li></ul>...
Types of Fraud Schemes <ul><li>Financial Misstatement (most costly) </li></ul><ul><ul><li>fictitious transactions </li></u...
Types of Fraud Schemes <ul><li>Commercial Bribery, extortion or corruption </li></ul><ul><ul><li>Kickbacks </li></ul></ul>...
Types of Fraud Schemes <ul><li>Computer Fraud </li></ul><ul><ul><li>Hacking </li></ul></ul><ul><ul><li>Security Penetratio...
Departments at risk <ul><li>Accounts Payable </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Payroll </li></ul...
Brainstorming Fraud risks (Whiteboard)
FRAUD RISK ASSESSMENT   <ul><li>FRAUD RISK ASSESSMENT  </li></ul><ul><li>TOPICS COVERED </li></ul><ul><li>3 Levels of RISK...
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Fraud risk assessment

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Fraud risk assessment

  1. 1. <ul><li>FRAUD RISK ASSESSMENT </li></ul><ul><li>JANUARY 11, 2012 </li></ul>
  2. 2. FRAUD RISK ASSESSMENT <ul><li>Objective : To obtain a general understanding of Fraud Risk factors to consider for 2012 audit activities. </li></ul><ul><li>The participant will learn : </li></ul><ul><li>1. Successful understand the Fraud Triangle </li></ul><ul><li>2. Successful be able to identify types of Fraud Schemes that might occur in our company </li></ul><ul><li>3. Will learn the various departments that could experience fraud activity </li></ul><ul><li>4. Through open discussion with the presenter identify specific areas of concern to look for or be aware of in 2012 </li></ul><ul><li>Objective: Importance of Fraud Risk Assessment & Awareness </li></ul>
  3. 3. Fraud Risk Assessment 3 Levels: <ul><li>Enterprise-wide risk assessment (Today’s discussion) </li></ul><ul><ul><li>Types of fraud </li></ul></ul><ul><ul><li>Risk ownership </li></ul></ul><ul><ul><li>Likelihood, given the control environment </li></ul></ul><ul><ul><li>Impact </li></ul></ul><ul><li>Business Process risk assessment (individual audits) </li></ul><ul><li>Fraud Penetration risk assessment (transaction level) </li></ul>
  4. 4. Fraud Triangle
  5. 5. Types of Fraud Schemes <ul><li>Asset misappropriation (most common) </li></ul><ul><ul><li>Embezzlement of funds </li></ul></ul><ul><ul><li>Theft of an asset </li></ul></ul><ul><ul><li>Misuse of assets </li></ul></ul><ul><ul><li>No Business Purpose </li></ul></ul><ul><ul><li>Payroll fraud </li></ul></ul><ul><ul><li>Overbilling by vendors/suppliers </li></ul></ul>
  6. 6. Types of Fraud Schemes <ul><li>Financial Misstatement (most costly) </li></ul><ul><ul><li>fictitious transactions </li></ul></ul><ul><ul><li>improper recognition </li></ul></ul><ul><ul><li>improper measurement (estimates, calculations, assumptions) </li></ul></ul><ul><ul><li>Improper disclosure or omission </li></ul></ul><ul><ul><li>Misapplication of GAAP </li></ul></ul>
  7. 7. Types of Fraud Schemes <ul><li>Commercial Bribery, extortion or corruption </li></ul><ul><ul><li>Kickbacks </li></ul></ul><ul><ul><li>Gifts, gratuities </li></ul></ul><ul><ul><li>Diverting Business </li></ul></ul><ul><ul><li>Bid rigging </li></ul></ul><ul><ul><li>Conflicts of Interest </li></ul></ul>
  8. 8. Types of Fraud Schemes <ul><li>Computer Fraud </li></ul><ul><ul><li>Hacking </li></ul></ul><ul><ul><li>Security Penetration </li></ul></ul><ul><ul><li>Loss of valuable/sensitive information </li></ul></ul>
  9. 9. Departments at risk <ul><li>Accounts Payable </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Payroll </li></ul><ul><li>Treasury </li></ul><ul><li>Land </li></ul><ul><li>Financial Accounting </li></ul><ul><li>Financial Reporting </li></ul><ul><li>Accounts Receivable </li></ul><ul><li>Operations </li></ul><ul><li>Engineering </li></ul><ul><li>Commercial </li></ul>
  10. 10. Brainstorming Fraud risks (Whiteboard)
  11. 11. FRAUD RISK ASSESSMENT <ul><li>FRAUD RISK ASSESSMENT </li></ul><ul><li>TOPICS COVERED </li></ul><ul><li>3 Levels of RISKS </li></ul><ul><ul><li>Enterprise-wide risk assessment </li></ul></ul><ul><ul><li>Business Process risk assessment </li></ul></ul><ul><ul><li>Fraud Penetration risk assessment </li></ul></ul><ul><li>FRAUD TRIANGLE </li></ul><ul><li>Types of FRAUD Schemes </li></ul><ul><li>Departments at Risk </li></ul><ul><li>Brainstorming Fraud risks </li></ul><ul><li>Q&A </li></ul>

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