© D.L. Crumbley
Fraud Risk-Assessment Process
1. Organize the assessment – integrate into organization’s existing business cycle or establish a separate cycle.
2. Determine areas to assess – conduct at company wide, business-unit, and significant-account levels.
3. Identify potential schemes and scenarios – typically affecting the industry or locations.
Fraudulent financial reporting.
Misappropriation of assets.
Expenditures and liabilities for an improper purpose (cash kickbacks and corruption).
Organization commits a fraud against employees or third parties.
Financial misconduct by senior management.