This document discusses fraud risk assessment and management. It covers key principles of fraud risk management programs including fraud risk assessment, prevention, detection, escalation, investigation and correction. The fraud risk assessment process involves identifying inherent fraud risks, assessing the likelihood and significance of risks, and responding to reasonably likely and significant residual risks. It provides examples of fraud risks across different areas like financial reporting, misappropriation of assets, corruption, and other risks. It also discusses establishing a fraud risk assessment team and outlines the fraud risk assessment framework and process.
Essentials of a Highly Effective Employee Fraud Awareness ProgramFraudBusters
Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com
This Webinar focused on the subject in the title
FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web.
FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware.
Essentials of a Highly Effective Employee Fraud Awareness ProgramFraudBusters
Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com
This Webinar focused on the subject in the title
FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web.
FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware.
On December 5, 2013, Ron Steinkamp, principal, government advisory services at Brown Smith Wallace, presented at the 2013 MIS Training Institute Governance, Risk & Compliance Conference. Ron focused on the following keys to fraud prevention, detection and reporting:
1. Anti-fraud culture
2. Fraud policy
3. Fraud awareness/training
4. Hotline
5. Assess fraud risks
6. Review/investigation
7. Improved controls
The presentation provides overall insight of operational fraud risk management. It explains the operational fraud risk and mitigation strategies. The role of Internal audit and audit committee is further exemplified
Ran a Fraud Investigation session online for The Institute of Chartered Accountants of Pakistan. These are slides for day 1. They cover introduction and context of fraud, profile of fraudsters, fraud investigations broad appraoch etc.
Most companies have ethics and compliance policies in place and those policies usually include training for employees. That training typically includes material about policies prohibiting discrimination and harassment, bribery and excessive gift-giving. But it usually does not teach employees how to recognize signs of fraud and how to report them.
Employee fraud awareness training is one of the most important ways your company can protect itself from fraud which, according to the Association of Certified Fraud Examiners, costs the average company five per cent of its revenues every year.
The slides provides fundamental understanding of concepts, principles and issues in fraud risk management. It is a comprehensive summary of general knowledge and understanding about the fraud risk management.
Forensic accountants use many tools to fine tune their fraud investigation process, yielding useable results during any fraud investigation. Learn more here.
On December 5, 2013, Ron Steinkamp, principal, government advisory services at Brown Smith Wallace, presented at the 2013 MIS Training Institute Governance, Risk & Compliance Conference. Ron focused on the following keys to fraud prevention, detection and reporting:
1. Anti-fraud culture
2. Fraud policy
3. Fraud awareness/training
4. Hotline
5. Assess fraud risks
6. Review/investigation
7. Improved controls
The presentation provides overall insight of operational fraud risk management. It explains the operational fraud risk and mitigation strategies. The role of Internal audit and audit committee is further exemplified
Ran a Fraud Investigation session online for The Institute of Chartered Accountants of Pakistan. These are slides for day 1. They cover introduction and context of fraud, profile of fraudsters, fraud investigations broad appraoch etc.
Most companies have ethics and compliance policies in place and those policies usually include training for employees. That training typically includes material about policies prohibiting discrimination and harassment, bribery and excessive gift-giving. But it usually does not teach employees how to recognize signs of fraud and how to report them.
Employee fraud awareness training is one of the most important ways your company can protect itself from fraud which, according to the Association of Certified Fraud Examiners, costs the average company five per cent of its revenues every year.
The slides provides fundamental understanding of concepts, principles and issues in fraud risk management. It is a comprehensive summary of general knowledge and understanding about the fraud risk management.
Forensic accountants use many tools to fine tune their fraud investigation process, yielding useable results during any fraud investigation. Learn more here.
This presentation provides an overview to preventing and detecting payroll fraud. It is of interest to payroll managers, finance directors, shared services specialists, and internal auditors.
Rushmore Forensic is a specialist forensic accounting firm based in Sydney, Australia.
Welcome to Falcon Hawk Consulting - Your Strategic Fraud Risk Management Partner
We invite you to peruse this introduction presentation.
We are sure you will find at least 1 slide or topic that will interest you.
We look forward to hearing from you
Have a great day!
Leveraging Technology Using Keyword Analytics in Fraud and Compliance MonitoringJim Kaplan CIA CFE
Keyword analytics is the process of using data analytics to find keywords in both structured and unstructured data for detecting fraud and compliance review anomalies. It can be used by auditors, accountants and lawyers. This presentation from the 2015 TeamMate User Conference presented the results of the AuditNet Keyword Survey with tools and a comprehensive list of more than 4,000 keywords, social media terms, terrorist keywords and more.
We continued our Celebrating 40 Years of Excellence! Fall Webinar Series with a webinar titled Fraud Prevention and Detection: Surprise Fraudsters Before They Surprise You. This webinar was hosted by Sam BowerCraft, Senior Manager and Dave Hammarberg , IT Director with McKonly & Asbury.
Check out our Upcoming Events page for news and updates on our future seminars and webinars at http://www.macpas.com/events/.
View a full recap of this webinar at http://www.macpas.com/fraud-prevention-and-detection-webinar/.
Fundamental controlling tool of fraud prevention and detection designed for company owners and top management. Protect at work and in business those honest against those unfair.
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Improving and Implementing Internal ControlsTommy Seah
Implementing and Improving Internal Controls
Articulating the increasing need for comprehensive in-house fraud control procedures
• Optimizing the accuracy and reliability of data acquired through internal inspections
• Detailing the process of applying controls inside the organization, and demonstrating the outcome
The initial stage of the supply chain process is the planning stage. We need to develop a plan or strategy in order to address how the products and services will satisfy the demands and necessities of the customers. In this stage, the planning should mainly focus on designing a strategy that yields maximum profit.
For managing all the resources required for designing products and providing services, a strategy has to be designed by the companies. Supply chain management mainly focuses on planning and developing a set of metrics.
1.4.2) Develop (Source)
After planning, the next step involves developing or sourcing. In this stage, we mainly concentrate on building a strong relationship with Develop of the raw materials required for
production. This involves not only identifying dependable suppliers but also determining different planning methods for shipping, delivery, and payment of the product.
Companies need to select suppliers to deliver the items and services they require to develop their product. So, in this stage, the supply chain managers need to construct a set of pricing, delivery and payment processes with suppliers and also create the metrics for controlling and improving the relationships.
Finally, the supply chain managers can combine all these processes for handling their goods and services inventory. This handling comprises receiving and examining shipments, transferring them to the manufacturing facilities and authorizing supplier payments.
1.4.3) Make
The third step in the supply chain management process is the manufacturing or making of products that were demanded by the customer. In this stage, the products are designed, produced, tested, packaged, and synchronized for delivery.
Here, the task of the supply chain manager is to schedule all the activities required for manufacturing, testing, packaging and preparation for delivery. This stage is considered as the most metric-intensive unit of the supply chain, where firms can e gauge the quality levels, production output and worker productivity.
The role of internal auditors in fraud risk management and the skill sets required in the current scenario...
The focus of audit has to change from transaction audit to value addition..
Presented at the MENA-OECD Business Integrity Training, 22-25 April, Kuwait. Organised by the MENA-OECD Investment Programme in cooperation with the IMF-Middle East Center for Economics and Finance
Fraud, bribery and corruption: Protecting reputation and valueDavid Graham
In support of International Fraud Awareness Week, Deloitte Risk Advisory has published a series of articles, the second of which has been introduced below. This article lists ten areas that executives and the audit committee should evaluate to help mitigate reputational risks of fraud, bribery and corruption
Dr haluk f gursel fraud examination rises to distinction article grcj 2010 1_v3_Haluk Ferden Gursel
Global firms are recognizing that the
anti-fraud profession is an important
component of risk measurement and
avoidance. The analysis below
illustrates how recent risk-based
management control systems are
hastening the development of
specialized anti-fraud agents. It is
evident that the increased public
appetite for transparency and enhanced
accountability has also spurred rapid
developments in the anti-fraud
discipline.
Setting Up and Managing an Anonymous Fraud HotlineFraudBusters
Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com
This Webinar focused on the subject in the title
FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web.
FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware.
Deloitte has been at the forefront of providing services to help clients - especially for some of the leading financial institutions - to help deal with myriad business and compliance issues presented by financial crime. See More : https://www2.deloitte.com/in/en/pages/finance/topics/forensic.html
Society of Corporate Compliance and Ethics SCCE 2015 developing an effective ...Craig Taggart MBA
Areas Covered in the Webinar:
Identify fraud risks and the factors that influence them
Analyze existing risk management frameworks and their application to managing fraud risk
Develop and implement the necessary components of a successful fraud risk management program
Identify the elements of a strong ethical corporate culture
Conduct a cost effective fraud risk assessment
E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...Jitske de Bruijne
Financial Institutions continue to face heightened fines and regulatory scrutiny over their AML/CFT Programs. This e-book helps you to manage AML/CFT Programs.
Fraud Risk Management | Fraud Risk Assessment - EY IndiaErnst & Young
Check out the edition of fraud risk management & fraud risk assessment understanding the client's organizational structure & business environment. For more details, visit http://bit.ly/1RtohKr.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
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As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
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It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
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Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
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Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
ACCA-IIA Singapore Seminar 2015 Part 3 Fraud Risk Assessment
1. ACCA-IIA Singapore Seminar Part 1
Part 3 Fraud Risk Management
Leveraging your internal control process to
prevent and manage internal fraud
Tuesday, 6 October 2015
9:00am – 5:00pm
1
2. Principle 2
Fraud risk exposure should be assessed
periodically by the organization to
identify specific potential schemes and
events that the organization needs to
mitigate.
2
3. Key Principles
3
1. Fraud Risk
Management
Program
2. Fraud Risk
Assessment
3. Fraud
Prevention
4. Fraud
Detection
5. Escalation,
Investigation
and Correction
Fraud Risk Assessment
• Risk Identification
• Probability and Impact
Analysis
• Response
4. Fraud Risk Assessment
How might a fraud perpetrator exploit
weaknesses in the system of controls?
How could a perpetrator override or
circumvent controls?
What could a perpetrator do to conceal the
fraud?
4
5. Fraud Risk
Assessment
3 Key
Elements
Identify inherent fraud
risk
Gather information to obtain the
population of fraud risks that could
apply to the organization.
Included in this process is the explicit
consideration of all types of fraud
schemes and scenarios; incentives,
pressures, and opportunities to commit
fraud; and IT fraud risks specific to the
organization.
Assess likelihood and
significance of inherent
fraud risk
Assess the relative likelihood and
potential significance of identified
fraud risks.
Based on historical information,
known fraud schemes, and
interviews with staff, including
business process owners.
Respond to reasonably
likely and significant
inherent and residual
fraud risks
Decide what the response should be to
address the identified risks and perform a
cost-benefit analysis of fraud risks over
which the organization wants to implement
controls or specific fraud detection
procedures.
5
6. Fraud Risk Assessment Framework
Identified
Fraud Risks and Schemes
Likelihood Significance
People
and/or
Department
Existing
Anti-fraud
Controls
Controls
Effectiveness
Assessment
Residual
Risks
Fraud Risk
Response
Financial reporting
Revenue recognition
-Backdating agreements
-Channel stuffing
- Inducing distributors to accept more product
than necessary
-Holding books open
- Via recording detail transactions in a sub-ledger
-Via recording top-side journal entries
-Additional revenue risks
Management estimates
-Self insurance
- Altering underlying detail claims and estimate
data
- Fraudulently changing underlying assumptions
in estimation of liability
- Allowance for bad debts
- Altering underlying A/R aging to manipulate
computation
- Fraudulent input from sales persons or credit
department on credit quality
-Additional estimates
Disclosures
-Footnotes
6
7. Fraud Risk Assessment Framework
Identified
Fraud Risks and Schemes
Likelihood Significance
People
and/or
Department
Existing
Anti-fraud
Controls
Controls
Effectiveness
Assessment
Residual
Risks
Fraud Risk
Response
Misappropriation of assets
Cash/check
- Point of sale
-Accounts receivable application process
-Master vendor file controls override
- Additional risks
-Inventory
-Theft by customers
-Theft by employees
-Other assets at risk
Corruption
-Bribery
-Aiding and abetting
Other Risks
7
8. Risk Assessment Team
Accounting/finance personnel, who are familiar
with the financial reporting process and internal
controls.
Nonfinancial business unit and operations
personnel, to leverage their knowledge of day-to-
day operations, customer and vendor
interactions, and general awareness of issues
within the industry.
Risk management personnel, to ensure that the
fraud risk assessment process integrates with the
organization's ERM program.
Legal and compliance personnel, as the fraud
risk assessment will identify risks that give rise to
potential criminal, civil, and regulatory liability if
the fraud or misconduct were to occur.
8
9. Internal audit personnel, who will be familiar with the
organization's internal controls and monitoring functions.
In addition, internal auditors will be integral in developing
and executing responses to significant risks that cannot
be mitigated practically by preventive and detective
controls.
If expertise is not available internally, external
consultants with expertise in applicable standards, key
risk indicators, anti-fraud methodology, control activities,
and detection procedures.
Management, including senior management, business unit
leaders, and significant process owners (e.g., accounting, sales,
procurement, and operations) should participate in the
assessment, as they are ultimately accountable for the
effectiveness of the organization's fraud risk management
efforts.
9
11. Population of FraudRisk
Understanding the organization's
business processes
Identifying potential fraud schemes
1. through interviewing of staff;
2. brainstorming with staff;
3. reviewing complaints from the whistleblower
hotline;
4. performing analytical procedures.
11
12. Major Categories of Fraud
Fraudulent
Financial
Statement
Misappropriation
of Assets
Corruption
12
13. Fraud Risk Assessment Source (4)
How to identify possible
misappropriation of assets
TANGIBLE
INTANGIBLE
Q (1) What are the necessary “controls” relevant to the prevention and
detection of misappropriation of assets?
Q. (2) What are the relevant questions to ask?
Group Discussion
13
14. Fraud Risk Assessment Source(4)
Corruption = Misuse of entrusted power for private gain
• US Foreign Corruption Practice Act 1977 – Apply to whom?
• UK Bribery Act
• National Law – Singapore ??? (Prevention of Corruption Act)
PRC ??? (刑法 Criminal Law)
Hong Kong – Prevention of Bribery Ordinance
Group Discussion
• Does US Foreign Corruption Practice Act or UK Bribery Act apply to
your organization?
• What are the controls to prevent and detect corruption?
• What are the Corruption Perception Index in your country, your
overseas operations?
(See Transparency International Website) (p26) 14
15. Types of Fraud
1)Intentionalmanipulationoffinancialstatements,whichcanleadto:
a) Inappropriately reported revenues.
b) Inappropriately reported expenses.
c) Inappropriately reflected balance sheet amounts, including
reserves.
d) Inappropriately improved and/or masked disclosures.
e) Concealing misappropriation of assets.
f) Concealing unauthorized receipts and expenditures.
g) Concealing unauthorized acquisition, disposition, and use
of assets.
15
16. 2)Misappropriationof:
a) Tangible assets by:
i) Employees.
ii) Customers.
iii) Vendors.
iv) Former employees and others outside the
organization.
b) Intangible assets.
c) Proprietary business opportunities.
3) Corruption including:
a) Bribery and gratuities to:
i) Companies.
ii) Private individuals.
iii) Public officials.
b)Receiptofbribes,kickbacks,andgratuities.
c)Aidingandabettingfraudbyotherparties(e.g.,customers,vendors).
16
17. Information Technology and Fraud Risk
Fraudulent Financial Reporting
Unauthorized access to accounting applications
Override of system controls
Misappropriation of Assets
Theft of tangible assets
Theft of intangible assets
Corruption
Misuse of customer data
Examples of IT risks by area include:
17
18. Other Risks
Regulatory and Legal Misconduct
Regulatory and legal misconduct includes a wide range of
risks,
such as conflicts of interest, insider trading, theft of
competitor trade secrets, anti-competitive practices,
environmental violations, and trade and customs
regulations in areas of import/export.
Depending on the particular organization and the nature
of its business, some or all of these risks may be
applicable and should be considered in the risk
assessment process.
18
19. Other Risks
Reputation Risk
Reputation risk is evaluated differently by different individuals,
either as a separate risk or the end result of other risks (e.g.,
operational, regulatory, or financial reporting).
Fraudulent acts can damage an organization's reputation with
customers, suppliers, and the capital markets. For example,
fraud leading to a financial restatement damages an organization's
reputation in the capital markets, which could increase the
organization's cost of borrowing and depress its market
capitalization. Because the board is responsible for the longevity of
the organization and has responsibilities to multiple stakeholders,
it should evaluate its performance regularly with respect to
reputation risks and ensure that consideration of reputation risk is
part of the organization's risk assessment process.
19
20. Assessing Likelihood and Significance of Potential
Fraud Risk
0.
0.3
0.5
0.8
1.
1.3
0. 0.3 0.5 0.8 1.
Likelihood
Significance
Department / People
20
21. #6 #3
#4
#1
#2 #5
#7
Likelihood and significance
(grey = higher risk)
Risks
#1 –Shell company scheme
#2 – Overpayment scheme
#3 – Phony contractor scheme
#4 – Personal travel expenses
#5 – Fraudulent auditor/
inspector expenses
#6 – Check Tampering
#7 – Orders for personal
supplies Likelihood
Source :
How Internal Auditing Can Help with a Company’s Fraud Issues
QFINANCE by Gail Harden
21
22. Fraud Risk Assessment Accounts Receivable Process Owner:
<Insert Process Owner Name>
Fraud
Risk
Likelihood Significance Control Activity Preventive or
Detective
Has Audit
tested
Control?
Date
tested
Result Action
Plan
Theft of cash receipts
and. written off as bad
debts
High High Reconciliation
of bad debt expense
reserve
With supervisory
review.
Detective Yes 1/10/06 OK
Person posting
Receivables does not
also have system Access
to make Journal entries
to bad debt expense.
Preventative Yes 1/10/06 OK
Procedure exists and is
followed to turn over
delinquent
Accounts to a third-
party collections agency.
Preventative Yes 1/10/06 OK
Source :
How Internal Auditing Can Help with a Company’s Fraud Issues
QFINANCE by Gail Harden
22
23. Fraud
Risk
Likelihood Significance Control Activity Preventive or
Detective
Has Audit
tested
Control?
Date
tested
Result Action
Plan
Accounts
Receivables
reconciled to the
general
ledger by
Individual with
no conflicting
duties.
Detective Yes 1/10/06 OK
Accounting
Manager
authorization
required
to write off
uncollectible
accounts.
Preventative Yes 1/10/06 OK
Rebilling
of past
due items
to change
the # of
days past
due (To
change
DSO’s for
example).
Medium Medium Policy disallows
cancelling
And rebilling
Invoices unless the
Original was billed
to the
wrong client,
or some other
extenuating
circumstances.
Preventative Yes
Source :
How Internal Auditing Can Help with a
Company’s Fraud Issues
QFINANCE by Gail Harden23
24. Fraud
Risk
Likelihood Significance Control Activity Preventive or
Detective
Has Audit
tested
Control?
Date
tested
Result Action
Plan
All credits
require the use
of a request
form and
approval from
management
According to an
authorization
matrix.
Preventative Yes 1/10/06 OK
Duties to input
billing and
credits to the AR
system,
approvals for
credits, and
Collections
Activities are
segregated.
Preventative Yes 1/10/06 OK
Source :
How Internal Auditing Can Help with a Company’s Fraud Issues
QFINANCE by Gail Harden24
25. Fraud
Risk
Likelihood Significance Control Activity Preventive or
Detective
Has Audit
tested
Control?
Date
tested
Result Action
Plan
Kitting – writing
Checks against
Insufficient funds
or unavailable
funds and hoping
the funds are
Deposited or
become available
before the checks
clear the
account.
Medium Low The Accounting
Manager has a
“cash card”
where cash
Receipts and
Disbursements
are logged. He
Monitors the
cash level and
Transfers money
from
Savings when
Necessary to
cover
disbursements.
The Controller
Approves the
disbursement
Batches and also
has access to
monitor the
daily cash
position.
Preventative Yes 1/10/06 OK
Source :
How Internal Auditing Can Help with a
Company’s Fraud Issues
QFINANCE by Gail Harden
25
26. Fraud
Risk
Likelihood Significance Control
Activity
Preventive or
Detective
Has Audit
tested
Control?
Date
tested
Result Action
Plan
ZBA Accounts
– type of bank
Account where
funds are
Transferred from a
deposit
Account to a
disbursement
account as
disbursements
Are Presented for
payment.
Preventative Company
does not
currently
use ZBA
accounts.
Positive pay set up
with the bank. This
is a practice
where the Company
sends a file to the
bank of all the
disbursements
Generated and the
bank will only pay
those that are on
the file.
Preventative Company is in
Progress to set
up this type of
arrangement.
Source: http://www.qfinance.com
Source :
How Internal Auditing Can Help with a Company’s
Fraud Issues
QFINANCE by Gail Harden 26
27. Response to Residual Fraud Risks
Depending on risk tolerance
Varies from organization to
organization
a. Accepting the risks?
b. Increasing the controls over the area to
mitigate the risk?
c. Designing internal audit procedures to
address specific fraud risks
27
28. Fraud Risk Management
28
Identity Potential
Inherent Risk
Assess Likelihood of the
Identified Fraud Risk
Evaluate Potential
Suspects
Evaluate their possible
methods
Identify & map out the
existing prevention and
detective controls to
reduce fraud risks
Evaluate whether the
identifier controls are
operating effectively &
efficiently
Identify & evaluate fraud
risks regarding
ineffective or non-
existent controls
Respond to residual
fraud risks Source: Managing the business risk of
fraud 2008 ACFE
29. Source: Managing the business risk of
fraud 2008 ACFE 29
Physical Controls to Defer Theft & Fraud
KEY EMPLOYEES Senior Executives
Fraudulent Financial Reports
Skimming Schemes
Cash Larceny Scheme
Theft of Proprietary Information
Theft of Inventory & Equipment
Cheques Tempering Schem
Expenses Scheme
Cash Register Scheme
Corruption and FCPA
Purchasing and Billing Scheme
Payroll Scheme
Ghost Workers
Conflict of Interest
Fraud Risk Assessment