Fraud Risk Assessment (fra) Leaflet

FRAUD RISK ASSESSMENT We peel back the layers for you to see beyond the grey areas

What is Fraud Risk Assessment (FRA)? An assessment program that focuses on identifying fraud-related exposures within an organization. Why is FRA be important? It is integral to an effective fraud prevention program within any organization. Traditional risk assessments are not enough. They only link risks to an organization’s key objectives. Therefore, fraud can be overlooked during a traditional risk assessment if it is not considered a core company objective. How is an FRA conducted? At CFE International Consultancy Group Pte Ltd, we use a 7-step approach to ensure a thorough, effective assessment. The 7-step approach is briefly outlined below: 1.

ORGANIZE THE ASSESSMENT

Internal Audit can integrate the FRA process into an organization’s existing business cycle or establish a separate cycle for this purpose.

2.

DETERMINE AREASS TO ASSESS

To be effective, an FRA must be conducted at a company-wide, business-unit, and significant-account level.

3.

IDENTIFY POTENTIAL SCHEMES & SCENARIOS

Organizations can commit fraud, or be defrauded in myriad ways. Identifying an organization’s universe of potential fraud risks represents a critical stage in the FRA.

4.

ASSESS LIKELIHOOD OF FRAUD

FRAs consider the likelihood that a particular fraud will occur. The best source regarding specific risks is often the employees at the unit being assessed.

5.

ASSESS SIGNIFICANCE OF RISK

The significance of fraud risks, with a more than remote likelihood of occurring, is assessed.

6.

LINK ANTI-FRAUD CONTROLS

Control activities for fraud risks are identified, possible weaknesses of the controls are also considered.

7.

APPLY ASSESSMENT RESULTS TO AN AUDIT PLAN

The FRA results are documented and considered when an organization’s audit plan is being developed.

An FRA can be viewed as the corporate equivalent of a visit to the dentist: Senior management and the board may anticipate pain, yet they experience relief if the assessment determines that risks are under control. Effective FRAs not only provide peace of mind but can also have a positive impact on an organization’s bottom line.

CALL TODAY FOR A COMPLIMENTARY TRIAL ASSESSMENT! NO OBLIGATIONS Please call Cheryl (+65 6222 9862) or Joanne (+65 6222 9863) or email [email protected] for more information

ORGANIZED & ASSESSED BY THE ONLY PRACTICISING CERTIFIED FRAUD EXAMINER (CFE) FIRM IN THE ASIA PACIFIC.