Fraud Risk Assessment

Having a reputation for integrity is crucial to safeguarding market confidence and public trust. Unfortunately fraud and misconduct can seriously undermine such efforts. The area of Fraud Risk Management is increasingly attracting mainstream attention as various stakeholders have begun to comprehend the negative effects of uncontained risk. A strong anti-fraud stance, risk assessment, proactive and comprehensive approach to combating fraud is now gradually becoming a pre-requisite and any organization that fails to protect itself appropriately, faces increased vulnerability to fraud.

One of the greatest requirements of modern times is to understand the risks and increase the preparedness and ability to nip fraud and wrongdoing in the early stages. Fraud risk assessment expands upon traditional risk assessment, it is scheme and scenario based rather than based on control risk or inherent risk.

To assist management in assessing, improving and monitoring internal control structure with Fraud Risk Management, we help organisations create an FRM framework as a component of their overall risk management strategies, with the framework including various policies, procedures, tools and mechanisms for prevention, detection and investigation of fraud. No system of internal controls can fully eliminate the risk of fraud though well-designed and effective controls can deter it.

A fraud risk assessment generally includes three 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.
Our approach to assessment includes:
  • Evaluation of fraud risk factors and elements and identify possible fraud schemes / scenarios.
  • Prioritization of identified fraud risks
  • Evaluating whether mitigating controls exist or are effective
  • Documenting the risk assessment process & conclusions
  • Conducting periodic reviews and updates



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