{"id":2455,"date":"2024-02-28T07:50:33","date_gmt":"2024-02-28T07:50:33","guid":{"rendered":"https:\/\/sudhadigital.com\/GMSI\/?p=2455"},"modified":"2024-03-09T14:45:16","modified_gmt":"2024-03-09T14:45:16","slug":"challenges-faced-by-senior-management-and-the-board-in-understanding-fraud","status":"publish","type":"post","link":"https:\/\/gmsisuccess.in\/?p=2455","title":{"rendered":"Challenges faced by senior management and the Board in understanding fraud"},"content":{"rendered":"

Enhanced focus on the consideration of fraud risks:<\/p>\n

\u2022 Fraud risk is not considered top of the Board\u2019s agenda due to the perceived low cost of losses due to fraud;
\n\u2022 Inordinate reliance on internal audit teams to tackle fraud risks;
\n\u2022 Limited understanding of what constitutes an effective fraud risk management program.<\/p>\n

*Assess the types of frauds that can\u00a0impact business:<\/p>\n

Consider relevant types of fraud, such as fraudulent financial reporting,\u00a0possible loss of assets, and corruption schemes through which fraud\u00a0and misconduct can occur.<\/p><\/blockquote>\n

*Consider ways that fraud can occur :<\/p>\n

Some of the factors to be considered, include:
\n\u2022 Management bias (e.g., in the selection of accounting principles)
\n\u2022 Degree of estimates and judgments in external reporting
\n\u2022 Vulnerability to management override and potential schemes to
\ncircumvent existing control activities
\n\u2022 Understanding bribery and corruption risks
\n\u2022 Geographic regions, where the entity does business, and prevalent
\nfraud risks in that region
\n\u2022 Incentives that may motivate fraudulent behavior (e.g., identifying
\nthe entity\u2019s fraud risks, particularly when earnings pressures and
\naggressive incentive compensation programs exist)
\n\u2022 Nature of technology and management\u2019s ability to manipulate
\ninformation
\n\u2022 Unusual or complex transactions subject to significant management\u00a0influence.<\/p><\/blockquote>\n

*Address fraud risks in light of changes in\u00a0the operating environment:<\/p>\n

Re-evaluate fraud risks as and when there are changes in the entity\u00a0or external environment, such as regulatory changes or business\u00a0environment.<\/p><\/blockquote>\n

*Understand fraud risks through business\u00a0partners:<\/p>\n

Assess the manner in which work is performed by vendors, outsourced\u00a0agencies and other third parties doing business for and on behalf of\u00a0the company.<\/p><\/blockquote>\n

*Review results of the fraud risk assessment undertaken:<\/p>\n

Periodically review the results of the fraud risk assessment with the\u00a0audit committee, and challenge the findings of the assessment for\u00a0aspects, such as management override of controls.<\/p>\n

http:\/\/www.gmsisuccess.com<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Enhanced focus on the consideration of fraud risks: \u2022 Fraud risk is not considered top of the Board\u2019s agenda due to the perceived low cost of losses due to fraud; \u2022 Inordinate reliance on internal audit teams to tackle fraud risks; \u2022 Limited understanding of what constitutes an effective fraud risk management program. *Assess the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[17],"tags":[],"class_list":["post-2455","post","type-post","status-publish","format-standard","hentry","category-risk-management"],"_links":{"self":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2455"}],"version-history":[{"count":1,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2455\/revisions"}],"predecessor-version":[{"id":2456,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2455\/revisions\/2456"}],"wp:attachment":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}