Principles of Fraud Examination, 4th Edition

APPENDIX C

RISK ASSESSMENT TOOL

INTRODUCTION

The ACFE's Fraud Risk Assessment Tool can be used by fraud examiners to identify their clients' or employers' vulnerabilities to fraud.

The Fraud Risk Assessment Tool consists of 15 modules, each containing a series of questions designed to help organizations zoom in on areas of risk. The fraud professional and the client or employer should begin the risk assessment process by working together to answer the questions in each module. It is important that the client or employer select people within the organization who have extensive knowledge of company operations, such as managers and internal auditors, to work with the fraud professional. Upon completion of all of the questions, the fraud professional should review the results of the assessment with the client or employer in order to:

• Identify the potential inherent fraud risks.
• Assess the likelihood and significance of occurrence of the identified fraud risks.
• Evaluate which people and departments are most likely to commit fraud and identify the methods they are likely to use.
• Identify and map existing preventive and detective controls to the relevant fraud risks.
• Evaluate whether the identified controls are operating effectively and efficiently.
• Identify and evaluate residual fraud risks resulting from ineffective or nonexistent controls.
• Respond to residual fraud risks.

The Fraud Risk Assessment Tool may reveal certain residual fraud risks that have not been adequately mitigated ...