What is a Fraud Risk Assessment?
Fraud Risk Assessment is a tool used by risk managers to proactively identify business vulnerability to fraud. Fraud risk assessments help prevent fraud that can take place in the form of corruption, asset misappropriation, theft of intellectual property, etc.
The Association of Certified Fraud Examiners reported that small businesses lose twice as much due to fraud compared to big businesses. This is mainly because small businesses have a more trusting environment and less internal controls to mitigate fraud risk.
Benefits of Performing Fraud Risk Assessments
Conducting fraud risk assessments help organizations:
- Improve communication within teams;
- Identify which business processes are most vulnerable to fraud;
- Find out which individuals may expose the organization to fraud risks;
- Examine existing internal controls; and
- Develop plans and techniques to mitigate fraud risks.
Tips on Fraud Risk Assessment
Here are some tips for conducting an effective fraud risk assessment:
#1 Build a team - create a team who will plan and set the goals for conducting the risk assessment
#2 Identify - know what fraud risks your business may be exposed to
#3 Assess - what will be the risk’s impact on the business? What needs to be done? What’s the cost of in/action?
#4 Communicate - disseminate a report of your findings along with the fraud policy to the whole organization and other parties concerned
#5 Implement - take action to address the fraud and put in place updated controls to mitigate fraud risks
#6 Monitor - continuously monitor your organization through regular random audits, improve processes to control fraud risks, and communicate your findings
Using Digital Fraud Risk Assessment Templates
Paper-based fraud risk assessment templates are tedious and time-consuming for inspectors to complete. Data needs to be collected from multiple sources, sorted, and manually analyzed in order to determine the correct plan of action.
iAuditor, the world’s #1 auditing tool, can help conduct effective fraud risk assessments. Upgrade your assessment workflows by incorporating digital auditing into your process. Develop better reporting mechanisms and receive real-time results of anti-fraud controls. Observe how your business is reducing fraud risks using an online dashboard.
Get started by downloading these pre-built fraud risk assessment templates. All templates are 100% customizable - no programming skills required - so you can fit them to your business needs.