Enterprise risk assessments help organizations understand inherent risk factors being faced entity-wide. These risks can vary widely and include both internal risks, such as management choices, performance expectations, resource allocation and internal reporting processes, and external risks, such as industry-wide changes to laws and regulations, environmental/economical changes, and both financial and non-financial reporting objectives.
According to COSO’s 2013 Internal Control Integrated Framework, one of the most integral elements of the enterprise risk assessments is fraud. Assessing your organization’s risk for fraud and implementing a fraud risk assessment requires 3 primary actions:
- Understanding the types of fraud and their risk to your organization
- Considering motivations, opportunities and rationalization
- Developing a fraud risk assessment methodology
Fraud risk assessments are an essential piece of implementing the COSO 2013 Framework and, if planned and executed properly, can minimize future fraud risk as a whole.
To learn more about implementing the 2013 COSO Framework in your organization, download our COSO 2013 Risk Insights document. Or for more information on the risks fraud can pose to your organization and how to control it, review the following slideshow by Alyssa Martin, partner-in-charge of risk advisory services.