Practice Guide: Internal Auditing and Fraud
Strongly Recommended Guidance
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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