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This course is dedicated to reviewing leading edge concepts for conducting fraud risk assessments and scenario analysis.

The topic of fraud — whether it relates to awareness and prevention techniques, fraud auditing, recent fraud in corporate America, or the criminal mind — continue to be on the radar of investors, shareholders, and regulators. Yet execution of holistic fraud risk assessments can often be a very difficult task. 

COSO 2013 places stronger emphasis on the need for strong evaluation and risk assessments for Fraud.  Auditors and Compliance professionals debate the proper form and depth needed for such assessments. Organizations will need to become more transparent with their fraud assessments and scenario analysis.  It is incumbent on individuals within the internal audit, compliance and legal field to ensure management accepts this role with the intent of full transparency.

Intro Video Transcript

Hello everyone and welcome in on today session. Today we're going to be talking about fraud risk assessments. Now risk assessment is a typical word the most compliance professionals or auditors or lawyers who familiar well and organizations are becoming much more familiar with themselves also. The topic of progress assessment is something that shouldn't be new but it is considered one of the newer elements that people are now focusing on. Part of the focuses because COSEC 2013 the new framework that was released by the Committee of sponsoring organizations in May, the updated framework I should say, actually puts a very significant focus on organizations being able to appropriately assess the risk of fraud that may occur in their organizations and notice I said organisations not necessarily that internal auditor should do it or compliance professionals should do it. So this session is just signed to give you some thoughts in regards to what is her progress assessment things that you might want to think about forty organization when trying to determine how to go about performing of progress assessment and also to give you some ideas about the different levels of assessment the thorough there. So with that I will also referred to. I had one previous segment that really talked more about fraud on overall and fraud processes organizations should be using both to establish an anti-fraud program, evaluate for fraud, monitor for fraud, fraud red plaques are. So invite you to go out and look at that particular segment. It may help especially prior to viewing this particular segment. With that I'm your facilitator, my name Lynn Fountain. I'm a subject matter expert in areas as sarbanes-oxley, enterprise risk management, internal audit, fraud, governance and ethics and compliance. I have over 35 years’ experience from these various serious. I have been a past chief audit executive produced large international companies. In both cases have had the opportunity for the misfortune whatever you wanna call it basically execute on progress assessment but also to have actual incident fraud and in one incident I actually was involved with valuating a thirteen million dollar fraud that occurred over a seven-year period ended up complicating it over 20 internal employees and an end up getting passed to the FBI and the vendors that were involved in the fraud were indied. So it was quite an elaborate setup we weren't quite a bit about fraud and really the aspects of what people think and do in relationship to that. I am a published author. I am currently offering a book for the Institute of Internal Auditors Research Foundation on fraud and it's going to be called raise a red flag and its auditor’s tool really to setting up appropriate processes within their organizations to evaluate, monitor and manage typical fraud type investigations also a lot of fraud risk assessment processes so it's not really just for internal auditors but for all management, audit committee, boards and financial management better understand the implications of fraud. So I tried to look that. It should be out in 2015. I also will be offering a book that will be called the realities of performing the cheap honored executive role in today's economy that particular application will be out in later 2015 and it is being sponsored through a organization out of Canada. So, I invite you to look at that. My contact information is there on the screen and by to check out my website if you have any questions after viewing this webinar or any questions on any of the other webinar I have performed please recheck. I'm always happy to network and speak with people I think that's best when we learn. I do have several webinars how they're on some leading practice internal audit type processes as well as several different individual segments on COSEC 2013. So with that let's talk a little bit about what today's agenda. First come to talk a little bit about the fraud dilemma. Why do we still have tried in corporate America? Now I reviewed some of that in my last segment. So we won't go into that detail, will talk a little bit about the definition of fraud and what things are causing corporate white-collar fraud in today’s business. Then we'll get into really if you going to do progress assessment for your company where to start? What do you look at? How do you evaluate that? Is there preparations steps that you will need to do prior to even beginning in to a risk assessment? Then I'll talk a little bit about what are called macro progress assessment versus a micro blog risk assessment. If you've had experience in these areas you know that you can do a progress assessment at the very high Organization level and of course there is a very detail progress assessments that are done more in the process level at the process where you basically evaluate scenarios. Will talk about those a little bit. I'll show you some tools and templates that you might be able to use, again these will be further enhanced with in the book and the processes that I'm running well the Institute of Internal Auditors. So, I invite you to look for those when it comes out. Now as a brief introduction we're on the topic fraud continues to be on the radar of everyone, fast search radar of our stakeholders, our shareholders, our customers, even the community simply left then that's well as regulators of course. there's been a lot of fraud surveys out there I like to refer to one it's called The Kroll Advisory Board and they do a very good fraud anslysis almost across countries and it normally comes out in the latter part of every year sometimes around now October to November but from the recent survey said they found they did find that process to Crystal you can see it's still very significant corporate America. so we're always, will probably always gonna find fraud right out there and part of that is the psychology behind fraud when I went through my last webinar are you know everyone thinks different, everyone looks at things, different people have different motivations, different rationalizations as we talked about in last webinars, the fraud triangle and I introduced the fraud diamond, so there's a lot of things to consider and that's why it's important organizations to stay on top of what their risks from fraud. You know we hire good people, we hope they don't commit fraud but we never know what pressure and pressure points are put on this individuals. So it's good for organizations to think through their various processes, understand where their control sly, where the biggest risks are and what types of things could happen in their organizations. The other point is that we have ongoing technological advancement and that's creating just a whole new era of what projects can actually do, you know we have social media out there, we have the cloud and how it works and a lot of people don't understand the cloud and how it works. So there's a lot of new way that fraud loser are learning how to commit fraud and they seem to always be one step in front of the professionals. So it's important it says on the top of the radar for companies, executives and boards and that internal auditors in compliance professionals and just financial officials say aware of the implications they can be cost out there. So I want to come back to my definition of fraud find this in my last one but I want to reiterate it. if you look at the true definition you see that I have to work intentional underlined and if you talk to any lawyer out there they will tell you that fraud as an intentional act or omission designed to conceive others. Now in a court of law to proof a, fraud especially white-collar fraud your lawyer will tell you literally have to prove intent that the person that to see someone and that's why becomes very difficult for organizations they like to internally investigate fraud but sometimes if you're not walking the right processes and maintaining that appropriate communication with your legal people and if you don't know the proper steps to take you could actually be putting your organizational risk. so many organizations go out and get the forensic investigators who really know how to maintain that trail of evidence but it's again as we go through this and as we go through the process of when you think about risk assessing for fraud, keep in mind that fraud as an intentional act, it meant to deceive and the person meant to do it and that's an very important point.

Learning Objectives

  • Identify the fraud dilemma.
  • Discover how to assess risk considerations and where to start.
  • Identify the preparation steps before initiating a fraud risk assessment.
  • Discover how to perform a Macro Fraud Risk Assessment
  • Recognize the elements of a Micro Fraud Risk Assessment
Last updated/reviewed: December 01, 2017

Included In Certifications

This course is included in the following Expert Certifications:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Intro to Forensic Accounting and Investigation
  2. Dissecting the Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash Component of Asset Misappropriation
  6. Fraud: Focus on Inventory
  7. Fraud: Focus on Financial Statement Fraud – Part One
  8. Fraud: Focus on Financial Statement Fraud – Part Two
  9. Fraud and COSO 2013
  10. Top Fraud Schemes
  11. Fraud Risk Assessments

36 Reviews (118 ratings)Reviews

5
Anonymous Author
Every company out there should make the effort to do a Fraud Assessment as it is not a matter of IF Fraud will happen at your company - but when (or has it already happened?). Lynn provided a great background on what companies should do to get the ball rolling.
4
Member's Profile
A very good course on establishing a fraud risk assessment. This could be applied at any organization as the goal is to ultimately operate controls as effectively as possible.
4
Member's Profile
Perhaps a bit more detail of the specific content of both the macro and micro assessments. Otherwise an excellent overview.
5
Anonymous Author
The maturity model was well described and laid out. Also, the training provided a great overview of macro vs. micro.
5
Member's Profile
I clearly have a better understanding of what fraud is. The information was clear, concise and easy to understand.
4
Anonymous Author
Great course, very well presented and sensibly organized. Creates an appitite for further information.
4
Anonymous Author
This course provided more in-depth and hands on job information as compared to the COSO series.
5
Anonymous Author
Another great course with valuable takeaways to use for conducting fraud risk assessments.
5
Anonymous Author
Very clearly articulated and easy to follow. Material was very relevant and applicable
5
Anonymous Author
Very well done, Lynn; vivid coverage of risk assessments within the time frame.
4
Anonymous Author
Micro vs Macro discussion was very informative, good examples/visuals used.
4
Anonymous Author
Very elaborate material on how to conduct fraud risk assessments.
5
Member's Profile
Knowledgeable and well-spoken instructor. Thorough slides.
3
Anonymous Author
Prefer less marketing of presenter's wares during course.
4
Anonymous Author
Good understanding of Marco and Mirco fraud assessments
4
Member's Profile
good high level understanding of Fraud Risk Assessement
5
Member's Profile
It provided a comprehensive overview of the topic.
5
Member's Profile
Good overview of assessing an audit for fraud risk.
4
Anonymous Author
Very helpful in understanding the maturity model.
5
Member's Profile
Very good overview of the subject material.
4
Anonymous Author
Very broad fraud assessment guidelines.
4
Anonymous Author
good summary of Fraud risk assessments
4
Anonymous Author
Good info - more examples will help.
5
Member's Profile
Interesting subject matter.
4
Anonymous Author
It was a very good course
4
Anonymous Author
Course moves a bit slow
5
Anonymous Author
Very comprehensive :)
3
Anonymous Author
A lot of information!
4
Member's Profile
Great Presentation
4
Anonymous Author
Great overview.
4
Anonymous Author
Good content.
5
Member's Profile
Good overview
4
Member's Profile
Good details
4
Anonymous Author
Great Course
Anonymous Author
54
Member's Profile
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Prerequisites

Course Complexity: Intermediate

Prerequisite: Exposure to internal controls

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

2 QuestionsCourse Questions and Answers

Member's Profile

Hi Lynn,

Thank you for putting together a great class! The sample questionnaires/templates you provided in the course indicate that much of the risk assessment can be conducted offsite. High level reviews of transaction activity can be used to corroborate answers to questions and assist in the risk assessment process as well. However, areas such as inventory counts may require onsite observation. Please let me know your thoughts. Thank you kindly.

Stephen

Member's Profile

You are correct. Data analysis is a great way to evaluate information for fraud (just not an easy thing to provide templates for). There is many ways to examine transactional information to look for red flags and it is something very much encouraged in today's big data world.

As for inventory - I believe you can still use transactional analysis. Yes, onsite and inventory counts can be done - but we all know that when someone is watching, people will behave more appropriately. I worked on an FBI fraud investigation of inventory where the perpetrators had been doing the fraud for over 7 years and involved several different work sites. The red flags were all over the place, but when auditors came in to check things....they didn't identify the issue. Had they looked at the analysis of the transactional information, they would have seen that the employees in collusion were overriding segregation of duties.

Thanks for your observations

Course Syllabus
INTRODUCTION AND OVERVIEW
  23:14Where to Start
  13:46Measure Your Efforts
  6:16Fraud Risk Assessment Reality
  10:14Preparation Steps
  5:29Defining a Macro Assessment
  14:22Tolerance and Performing the Macro Assessment
  9:02Maturity Model Approach
  10:10Developing Maturity Model
  4:41Micro Risk Assessment Common Scenario Approach
  4:47 Micro Risk Assessment Process by Process
CONCLUSION
  8:50Micro Risk Assessment Fraud Indicators & Summary
Continuous Play
  1:47:09Fraud Risk Assessments
SUPPORTING MATERIALS
  PDFSlides: Fraud Risk Assessments
  PDFFraud Risk Assessments Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM