Fraud risk assessment as a component of a fraud risk management

Fraud risk assessment is a component of fraud risk management strategy that helps an organization and its stakeholders protect itself against fraud. It is a technique by management to detect and understand their fraud exposure, fraud risks, and the efficiency of existing anti-fraud controls and solutions.

Fraud risk assessment involves a comprehensive examination of fraud vulnerabilities, control environment evaluation, determining the likelihood of fraud risk, identifying material gaps, remediation, regular revalidation, and control implementation approval.

The objective of the risk assessment process is to evaluate hazards and, if required, mitigate them by improving control measures. The four primary aspects of fraud risk assessment are:

  • Asset Misappropriation,which evaluates the indicators of missing cash, inventories, and other assets
  • Non-financial and financial reporting,which evaluates inconsistencies that can indicate fraud in financial and non-financial reporting
  • Illegal actions,which evaluate any fraudulent activities within an organization’s operation
  • Regulatory compliance,which evaluates compliance with industry regulations and the organization’s efforts to meet regulatory standards.

A fraud risk assessment is critical in assisting organizations to proactively identify external and internal risks that can damage their reputation and assets and expose them to criminal or civil liability.

As a result, Riskhouse International can assist your organization in implementing a rigorous fraud risk assessment methodology that includes fraud risk identification and documentation, fraud risk analysis, fraud risk evaluation, and fraud risk treatment. Fraud risk assessment quantifies risks and allows your organization to prioritize more damaging frauds. Riskhouse will adapt a fraud risk-tolerance limit to your organization’s needs based on the results of the fraud risk assessment.

To learn more about this and to catch up on our other news and alerts you can visit our blog on our website at

Leave a comment

Your email address will not be published. Required fields are marked *