FRAUD

IIA Standards state: 1220.A1- Internal auditors must exercise due professional care by considering the:

• Extent of work needed to achieve the engagement's objectives;
• Relative complexity, materiality, or significance of matters to which assurance procedures are applied;
• Adequacy and effectiveness of governance, risk management, and control processes;
• Probability of significant errors, fraud, or noncompliance; and
• Cost of assurance in relation to potential benefits.

2210.A2- Internal auditors must consider the probability of significant errors, fraud, noncompliance, and other exposures when developing the engagement objectives.

This IIA Guidance Offers Practical Ideas to Manage Fraud Risk :

IIA, CAQ, FEI and NACD Join Forces to Mitigate Risk of Financial Reporting Fraud
The Institute of Internal Auditors (IIA) has announced it is collaborating with the Center for Audit Quality (CAQ), Financial Executives International,and  the National Association of Corporate Directors in a long-term effort to mitigate the risk of financial reporting fraud. The partnership was announced in conjunction with the release of the CAQ’s report, Deterring and Detecting Financial Reporting Fraud – A Platform for Action.

GTAG 13: Fraud Prevention and Detection in an Automated World
Through a step-by-step process for auditing a fraud prevention program, an explanation of the various types of data analysis to use in detecting fraud, and a technology fraud risk assessment template, the GTAG aims to inform and provide guidance to chief audit executives and internal auditors on how to use technology to help prevent, detect, and respond to fraud. The GTAG also supplements The IIA’s practice guide, Internal Auditing and Fraud, and informs CAEs and internal auditors on how to use technology to help prevent, detect, and respond to fraud. 

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.

Managing the Business Risk of Fraud: A Practical Guide is available as a free download. An executive summary report is also avaialble, click here to download. The Institute of Internal Auditors (IIA) along with the Association of Certified Fraud Examiners (ACFE), and The American Institute of Certified Public Accountants (AICPA), is pleased to announce the release of "Managing the Business Risk of Fraud: A Practical Guide."

This guidance outlines five key principles of a fraud risk management process and recommends ways in which boards, senior management, and internal auditors can fight corporate fraud. The report is the result of two years of work from a dedicated task force of more than 20 experts in the field of fraud risk identification, mitigation, and investigation.