Question

What key elements would you include as part of a fraud risk assessment?

Answer 1

Fraud risk assessment is an exercise by the management in which they assess the controls put in place by them for the possible frauds. If any loophole is found in the controls then a plan is devised to mitigate the risks.

Key elements of fraud risk assessment can be:

• Determining the areas which are prone to fraud like related party transaction
• Enlisting the controls put in by the management like chain of authority to approve the transaction, dual responsibility
• Determine what is the likelihood of occurance and its materiality
• What is the prescribed response for any fraud occuring
• Who are the persons responsible to monitor the controls and related activities/areas
• What monitoring activities were undertaken during the period.

Please note that an expert is allowed to guide you through the answer and not frame a final answer for you. I hope this helps, please give a like if so. Thanks :)