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Insights : Article

Fraud Risk Assessment Tool

By   Douglas (Doug) Cash

December 19, 2016

Many organizations have limited budgets for engaging outside specialists to evaluate internal controls and assess fraud risk within their control system. To respond to this need, Eide Bailly developed a cost-effective tool that assesses an organization’s fraud risk quickly and effectively. The result of our process is a fraud risk assessment report that measures an organization’s risk in three categories: overall control environment, preventative controls and detective controls, which then combine into an overall fraud risk assessment.

An example of the tool’s assessment of an organization’s overall fraud risk is as follows:

Fraud Risk

In addition to the summary graphic, the report lists several critical weaknesses within the organization’s internal controls that has led to the assessment result. These weaknesses can then be addressed by the organization’s governance body.

The first step in assessing an organization’s fraud risk using the tool is interview management and accounting personnel to identify specific strengths and weaknesses within the organization’s internal controls. Our fraud risk assessments can be performed in person or over the phone. A report can be quickly generated to provide the organization with a snapshot of the organization’s fraud risk.