Fraud Risk Assessment

Fraud Risk Assessment

INTRODUCTION.........................................................................................................................4
MAIN BODY..................................................................................................................................4
Give short answers for the following questions:.........................................................................4
i. Outline the factors on which fraud risk assessment depends...............................................4
ii. What are the main concepts about risk assessment?............................................................4
iii. What are the internal factors that should be considered for fraud risk assessment? What is
‘inherent risk’?.............................................................................................................................4
iv. Define the term ‘residual risk’..............................................................................................5
Prepare a fraud - risk assessment check list for any business of your choice.............................5
CONCLSUION..............................................................................................................................5
REFRENCES.................................................................................................................................6

MAIN BODY
Give short answers for the following questions:
i. Outline the factors on which fraud risk assessment depends.
Various factors are there that has been impacting fraud risk assessment which are to be
can be considered on different levels such as entity, behavioural, products and services,
geography, divisions, accounting and business processes, controls, computerized systems, etc. all
these has an very important role to play in helping in doing assessment of fraud within an
organization (McNeal, 2019).
ii. What are the main concepts about risk assessment?
The main concept that is being prepared within an organization for risk assessment is
stakeholders should be allowed to attract more and more investors. Main aim of this type of
assessment is to help an organization get aware about the factor and situation which can
drastically impact future growth of organization. Risk assessment concept deals with those
factors that is responsible for making an analysis possible which results into making an
organization focus upon control risk which can result into collapsing of growth of organization.
iii. What are the internal factors that should be considered for fraud risk
assessment? What is ‘inherent risk’?
Journal Entry Testing is that kind of internal factor that is going to play an important role
in making an organization identify the fraud that has been done. As if an employee or employer
has to commit a crime then changes are required to be made within the financial records of an
organization. In order to catch a fraud testing of journal entry is going to be done. In a financial
audit, inherent risk is most likely to occur when transactions are complex, or in situations that
require a high degree of judgment in regard to financial estimates (Epstein and Ramamoorti,
2016). Inherent risk is that kind of risk which is important for an organization as it makes in
analyzing of those complex kind of mechanism which impacts smoothness of an organization
and activities taking place in it.