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Kelompok 2
1. Mohammad Andi Purwanto
2. Dea Anas Stasya Insani
3. Hoirus Sholihin
4. Agus Sari
 Cressey’s Fraud Triangle teaches
 Pressure, Opportunity, and
rationalitation
 The vulnerability that an
organization faces from individuals
capable of combining all three of
these elements is fraud risk
 The nature of the business in which it
is engaged
 The environment in which it operates
 The effectiveness of its internal
controls
 The ethics and values of the company
and its employees
 Fraud risk assessment is a process aimed at
proactively identifying and addressing an
organization’s vulnerabilities to both
internal and external fraud.
 A fraud risk assessment starts with an
identification and prioritization of fraud
risks that exist in the business.
 In the simplest terms, the objective of a fraud
risk assessment is to help an organization
recognize what makes it most vulnerable to
fraud.
Why Should Organizations Conduct Fraud Risk
Assessments?
 Improve communication and awareness about
fraud.
 Identify where the company is most vulnerable to
fraud and what activities put it at thegreatest risk.
 Know who puts the organization at the greatest
risk..
 A good fraud risk assessment is one that fits within the
culture of the organization, is sponsored and supported by
the right people, encourages everyone to openly participate,
and is generally embraced throughout the business as an
important and valuable process
 Engendered Trust
 Determine the Best Techniques to Use in Conducting the
Fraud Risk Assessment
 Interviews
 POPULATION OF FRAUD RISKS?
 FRAUDULENT FINANCIAL REPORTING
 CORRUPTION
 Employee Assessment
 The employee assessment questions are
designed to assess the probability of a
fraudulent event occurring within the
organization
FRAUD RISK MANAGEMENT
What Is Risk Management?
Risk management involves the
identification, prioritization, treatment,
and monitoring of risks that threaten an
organization’s ability to provide value to
its stakeholders, whether increasing
profitability and shareholder value for a
for-profit entity or achieving program
specific goals for a nonprofit or
governmental agency.
The Current State of Risk
Management Initiatives
 Organizations face an increasing volume and complexity of
risks, with 63 percent of survey respondents admitting that they
were caught off guard by an operational surprise in the last five
years.
 Almost one-quarter of the organizations surveyed had no
enterprise-wide risk management processes in place even
though 55 percent of the organizations described their risk
culture as “strongly risk averse” or “risk averse.”
 At 70 percent of the organizations surveyed, the board of
directors is asking for increased senior involvement in risk
oversight.
 In addition to requests from the board of directors, the three
most frequently cited factors for increasing senior management
involvement in risk oversight are (1) regulator demands, (2)
emerging corporate governance requirements, (3) and a desire
to better anticipate unexpected risk events.
The Current State of Risk
Management Initiatives
 While the number of organizations embracing ERM is on the rise,
the level of risk management initiatives is still immature based
on responses from surveyors, with only 25 percent describing
their organization’s risk management maturity as “robust” or
“mature.”
 Only 32 percent of respondents indicated that an individual had
been formally assigned to serve as the Chief Risk Officer (CRO)
or an equivalent designation.
 While 36 percent of respondents indicated that their risk
inventories are maintained at the enterprise level, more than 68
percent of the organizations did not have defined guidelines or
measures on how to assess the probability and impact of risks.
 42 percent of respondents stated that their organizations either
had no structured process for identifying and reporting risk
exposures to the board or track risks by silos with minimal
reporting of aggregate risk exposures to the board.
The Current State of Risk
Management Initiatives
 One of the more notable areas needing improvement in risk
oversight is the integration of risk management with strategic
planning; 35 percent of organizations do not conduct any formal
risk assessments of emerging strategic, market, or industry
risks.
 Barriers to progress still exist that restrict the effectiveness of a
risk management process, with the most common being the
belief that “risks are monitored in other ways besides ERM.”
Risk Management
Frameworks
COSO Enterprise Risk Management—Integrated Framework
The eight components of the ERM Framework are:
1) Internal environment
2) Objective setting
3) Event identification
4) Risk assessment
5) Risk response
6) Control activities
7) Information and communication
8) Monitoring
Risk Management
Frameworks
Who Is Responsible for Managing
Fraud Risk?
Depending on the size and structure of the
organization, the following individuals and
groups may have key roles in ensuring effective
fraud risk management:
1) Executive management
2) The audit committee
3) The investigations group
4) The compliance function
5) The controller’s group
6) Internal audit
7) IT
8) Security
9) The legal department
The Objectives of a Fraud Risk
Management Program
The Objectives of a Fraud Risk Management Program
Fraud risk management programs must address
fraud before, during, and after it occurs.
Consequently, effective fraud risk management
programs must incorporate policies and procedures
designed to do all of the following:
a) Prevent fraud.
b) Detect fraud.
c) Respond to identified fraud.
Fraud Risk Management Program Components
According to Managing the Business Risk of Fraud,
the following ten components are important to
effectively manage fraud risk:
1) Statement of commitment
2) Fraud awareness
3) Affirmation process
4) Conflict disclosure
5) Fraud risk assessment
6) Reporting procedures and whistleblower
protection
7) Investigation process
8) Corrective action
9) Process evaluation and improvement (quality
assurance)
10) Continuous monitoring

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1. Fraud risk asessment (rev).pptx

  • 1. Kelompok 2 1. Mohammad Andi Purwanto 2. Dea Anas Stasya Insani 3. Hoirus Sholihin 4. Agus Sari
  • 2.  Cressey’s Fraud Triangle teaches  Pressure, Opportunity, and rationalitation  The vulnerability that an organization faces from individuals capable of combining all three of these elements is fraud risk
  • 3.  The nature of the business in which it is engaged  The environment in which it operates  The effectiveness of its internal controls  The ethics and values of the company and its employees
  • 4.  Fraud risk assessment is a process aimed at proactively identifying and addressing an organization’s vulnerabilities to both internal and external fraud.  A fraud risk assessment starts with an identification and prioritization of fraud risks that exist in the business.
  • 5.  In the simplest terms, the objective of a fraud risk assessment is to help an organization recognize what makes it most vulnerable to fraud. Why Should Organizations Conduct Fraud Risk Assessments?  Improve communication and awareness about fraud.  Identify where the company is most vulnerable to fraud and what activities put it at thegreatest risk.  Know who puts the organization at the greatest risk..
  • 6.  A good fraud risk assessment is one that fits within the culture of the organization, is sponsored and supported by the right people, encourages everyone to openly participate, and is generally embraced throughout the business as an important and valuable process  Engendered Trust  Determine the Best Techniques to Use in Conducting the Fraud Risk Assessment  Interviews  POPULATION OF FRAUD RISKS?  FRAUDULENT FINANCIAL REPORTING  CORRUPTION
  • 7.  Employee Assessment  The employee assessment questions are designed to assess the probability of a fraudulent event occurring within the organization
  • 8. FRAUD RISK MANAGEMENT What Is Risk Management? Risk management involves the identification, prioritization, treatment, and monitoring of risks that threaten an organization’s ability to provide value to its stakeholders, whether increasing profitability and shareholder value for a for-profit entity or achieving program specific goals for a nonprofit or governmental agency.
  • 9. The Current State of Risk Management Initiatives  Organizations face an increasing volume and complexity of risks, with 63 percent of survey respondents admitting that they were caught off guard by an operational surprise in the last five years.  Almost one-quarter of the organizations surveyed had no enterprise-wide risk management processes in place even though 55 percent of the organizations described their risk culture as “strongly risk averse” or “risk averse.”  At 70 percent of the organizations surveyed, the board of directors is asking for increased senior involvement in risk oversight.  In addition to requests from the board of directors, the three most frequently cited factors for increasing senior management involvement in risk oversight are (1) regulator demands, (2) emerging corporate governance requirements, (3) and a desire to better anticipate unexpected risk events.
  • 10. The Current State of Risk Management Initiatives  While the number of organizations embracing ERM is on the rise, the level of risk management initiatives is still immature based on responses from surveyors, with only 25 percent describing their organization’s risk management maturity as “robust” or “mature.”  Only 32 percent of respondents indicated that an individual had been formally assigned to serve as the Chief Risk Officer (CRO) or an equivalent designation.  While 36 percent of respondents indicated that their risk inventories are maintained at the enterprise level, more than 68 percent of the organizations did not have defined guidelines or measures on how to assess the probability and impact of risks.  42 percent of respondents stated that their organizations either had no structured process for identifying and reporting risk exposures to the board or track risks by silos with minimal reporting of aggregate risk exposures to the board.
  • 11. The Current State of Risk Management Initiatives  One of the more notable areas needing improvement in risk oversight is the integration of risk management with strategic planning; 35 percent of organizations do not conduct any formal risk assessments of emerging strategic, market, or industry risks.  Barriers to progress still exist that restrict the effectiveness of a risk management process, with the most common being the belief that “risks are monitored in other ways besides ERM.”
  • 12. Risk Management Frameworks COSO Enterprise Risk Management—Integrated Framework The eight components of the ERM Framework are: 1) Internal environment 2) Objective setting 3) Event identification 4) Risk assessment 5) Risk response 6) Control activities 7) Information and communication 8) Monitoring
  • 14. Who Is Responsible for Managing Fraud Risk? Depending on the size and structure of the organization, the following individuals and groups may have key roles in ensuring effective fraud risk management: 1) Executive management 2) The audit committee 3) The investigations group 4) The compliance function 5) The controller’s group 6) Internal audit 7) IT 8) Security 9) The legal department
  • 15. The Objectives of a Fraud Risk Management Program The Objectives of a Fraud Risk Management Program Fraud risk management programs must address fraud before, during, and after it occurs. Consequently, effective fraud risk management programs must incorporate policies and procedures designed to do all of the following: a) Prevent fraud. b) Detect fraud. c) Respond to identified fraud.
  • 16. Fraud Risk Management Program Components According to Managing the Business Risk of Fraud, the following ten components are important to effectively manage fraud risk: 1) Statement of commitment 2) Fraud awareness 3) Affirmation process 4) Conflict disclosure 5) Fraud risk assessment 6) Reporting procedures and whistleblower protection 7) Investigation process 8) Corrective action 9) Process evaluation and improvement (quality assurance) 10) Continuous monitoring