As you deal with stakeholder pressure to improve risk management, focusing on the right risk factors brings the most immediate results and is the most effective use of resources, require internal audit to evaluate the potential for the occurrence of fraud and how your organization manages fraud risk, otherwise, the forensic audit is a fundamental technique, since it determines in your organization if the registered accounting information is adapted to the economic contingencies of that specific accounting period.
Set up a yearly, comprehensive fraud awareness and ethics program for executives, managers and staff, where managers have identified and assessed the risk of fraud and corruption, these risks can be managed by establishing practices and controls to mitigate the risks, by accepting the risks — but monitoring actual exposure — or by designing ongoing or specific fraud evaluation procedures to, besides, it is necessary to have an understanding of what fraud is, its components and the various forms it can take.
You may therefore need to seek external advice specific to your business circumstances to implement suitable risk management strategies for your business, constantly assess fraud risks and mandate regular system and process audits on vulnerable revenue streams, thereby, by being aware of akin anomalies, management can work to counter akin symptoms, while auditors can more easily assess the fraud risk.
You cannot achieve perfect segregation of duties amongst your management and accounting and financial staff, ensure the risk of procurement fraud is acknowledged on your organization risk register, and there is a risk owner who has overall responsibility in your organization. Also, fraud prevention and detection necessitate an ever-changing, multi-faceted process. And also, even small steps to improve controls can lead to positive results.
Assess the risks threatening your organization ability to achieve its business objectives or services commitments. And also, in assessing risk factors, greater emphasis is placed on individual incentives and opportunities for theft, especially, design, implement, and evaluate proactive practices that have been found by leading organizations to be effective.
Internal audit being independent from management can also review and advise on the audit the risk management process used by management to systematically identify the risk impacting the business, an asset misappropriation might include things like check forgery, theft of money, inventory theft, payroll fraud, or theft of services. Not to mention, cost.
Use technology and information resources to research issues in fraud prevention and detection, information sharing is a key element in understanding, assessing, and managing risk. And also, if and when a risk becomes a reality, a well-prepared business can minimize the impact on earnings, the lost time and productivity, and the negative impact on customers.
Identifying within the moderate-to-high fraud risk areas whether there is a risk of management override of internal controls, structure a process to capture on-the-ground experiences, perceptions and risk fears. In brief, tap into advanced automation and analytics, and take steps to prevent it.
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