Many fraud-related collapses have led to governments around the world undertaking regulatory initiatives. A certain fraud risk management framework is necessary to meet these corporate responsibilities of transparency and accountability.
As a result of fraud-related defeats, governments around the world have accepted nonsupervisory enterprises in the fraud area. For an auditor to assume responsibility to treat Fraud in an Audit of a Financial Report necessitates more:
- Transparency in corporate accounting and reporting
- When board members and executives are personally needed for financial reports.
A Fraud Investigation Services framework is absolutely necessary to meet these corporate duties of transparency and accountability. An organization’s task is to enforce this risk management framework to effectively minimize fraud risk across all its operations, while at the same time bringing in flexibility to adapt to change.
What should the fraud risk management framework include? :
- Identify areas of high risk as the first substantive step in dealing with the issue for further analysis and assessment. You should know that risk identification is not able to contain financial risks – in some frauds such as cybercrime and information theft, damage to reputation occurs.
- You have to assess the risks after your organization has identified its own risk areas, and a Fraud Investigation Services fraud risk assessment covers all useful areas of operation. This provides a platform for a framework and strategy for a methodical, long-term monitoring and review strategy.
- All staff should be involved in order to detect fraud risk information, through an electronic survey tool. This tool can be used by the organization, or in the business unit.
Electronic surveys enjoy a few benefits:
- They help in detecting levels of fraud risk awareness among staff
- They enhance awareness of the effectiveness of the organization’s existing risk management framework, and its ability to prevent and trace fraud
- They can identify Fraud Investigation Services in some business units and/ or products
- They allow staff the means to report known or alleged corporate crime.
Undertaking a fraud risk assessment involves an important commitment by management and staff and should be taken care of by people, whether staff or consultants, with fraud risk expertise. With the completion of the assessment effectively, management can safeguard or prevent fraud against their organization.
The steps to do so include the following:
- To establish the context
- To identify the risks
- To analyze the risks
- To take stock of the risks
- To treat those risks.
While this process is ongoing, the Fraud Investigation analyst’s job is to frequently communicate, consult, monitor and review. A typical risk assessment can comprise a physical inspection of significant sites, detailed analysis of corporate policies and procedures, interviews with the head of staff, and analysis of accounting records, computer systems, and corporate documentation. The assessment has included management workshops and brainstorming of fraud settings. Reviews are comprised of areas of potential financial loss, but also on non-financial matters like intellectual property loss and security.
Many procedures for checking out the potential for fraud in business, payments, and corporate strategy, rules, and procedures used by businesses. Management uses this technique to recognize and evaluate business risks that put the organization at risk of fraud. With the discovery of a risk, a strategy can be created to reduce it by putting in place measures or systems and ranking people to oversee and carry out the plan to eliminate it.
How to Protect Risk
The most serious frauds can include large cash investments or destruction to the company’s brand image and reputation and financial stability. Thus, it will be significant to make huge efforts to put in place new methodologies. Risk quantification helps prevent this from occurring, so the fraud investigation service takes care of the impact matrix to estimate the associated risks in the high, medium, and low categories related to the risk exposures of the organizational units and trace the control loopholes to give management impartial views and low categories related to the risk exposures of the organizations and track the control loopholes to impart management impartial insights.