Internal Audit - Fraud Risks And Controls

Front 1

1. Corruption

Back 1

acts in which individuals wrongfully use their influence in a business transaction in order to procure some benefit for themselves or another person, contrary to their employer or the rights of another. Ex: kickbacks, self-dealing, or conflicts of interest.

Front 2

2. Common fraud perpetrator red flags

Back 2

living beyond their means, experiencing financial difficulties, and excessive organizational pressure

Front 3

3. Fraud

Back 3

any illegal act characterized by deceit, concealment, or violation of trust.

Front 4

4. Root causes of fraud

Back 4

perceived need or pressure, perceived opportunity, and rationalization.- Fraud Triangle

Front 5

5. Fraud detection

Back 5

occupational frauds are much more likely to be detected by a tip than by audits, controls, or other means.

Front 6

6. Impact

Back 6

the severity of outcomes caused by risk events.

Front 7

7. Likelihood

Back 7

the probability that a risk event will occur.

Front 8

8. Preventive control

Back 8

an activity that is designed to deter unintended events from occurring.

Front 9

9. Collusion

Back 9

acts involving two or more persons, working together, whereby established controls or procedures may be circumvented for the gain of those individuals.

Front 10

10. Detective control

Back 10

an activity that is designed to discover undesirable events that have already occurred.

Front 11

12. Professional skepticism

Back 11

the state of mind in which internal auditors take nothing for granted; they continuously question what they see and hear and critically assess audit evidence.