Practice Guide: Internal Auditing and Fraud
This guide discusses fraud and provides general guidance to help internal auditors comply with professional standards. Because fraud negatively impacts organizations in many ways — financially, reputational, and through psychological and social implications — it is important for organizations to have a strong fraud program that includes awareness, prevention, and detection programs, as well as a fraud risk assessment process to identify risks within the organization. To help organizations and internal auditors combat fraud, the guide discusses:
- Fraud awareness (e.g., reasons and examples for fraud and potential fraud indicators).
- Fraud roles and responsibilities.
- Internal audit responsibilities during audit engagements (e.g., execution responsibilities and communicating with the board).
- Fraud risk assessment (e.g., identifying relevant fraud risk factors and mapping existing controls to potential fraud schemes and identifying gaps).
- Fraud prevention and detection.
- Fraud investigation.
- Forming an opinion on internal controls related to fraud.
The guide also includes reference material, questions to consider, and a fraud risk assessment template.
This may be applicable to and useful for:
- Chief Audit Executives (CAEs).
- Executive and operating management.
- Other assurance providers (OAPs).
- Other professional regulatory bodies.
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