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The Importance of Fraud Risk Assessment

We provide you with fraud risk assessment to evaluate areas of potential vulnerabilities to fraudulent activities by analyzing your internal controls, business operations, and external factors to identify areas where fraud could occur, allowing you to implement preventative measures and monitoring systems to mitigate those risks.  With a fraud risk assessment, you can understand your overall risk and build the foundations for an effective fraud risk management program. It helps businesses develop strategies to prevent, detect, and respond to fraud.

Because we work in a robust business environment, it is important to establish an infrastructure that will ensure that our goals are met; resources are optimized; and fraud is minimized. There are three elements that enable someone to commit fraud and that is motive, opportunity, and rationalization.  People commit fraud because of either greed or need.  Fraud is possible due to weaknesses in internal controls.  A fraud risk assessment is tailored to your unique industry, risks, and operations.  We work with you to establish a risk assessment program tailored to your needs.

Over $3.5 Billion in Losses Annually

Whether caused by mistake or fraud, trust and urgency are critical to problem resolution.  Our team provides the highest standards for detection, assessment, and analysis.  We work closely with you to determine whether fraud or mismanagement has occurred.  We will review your business practice to identify and mitigate any weaknesses.  Based on our findings, we will make recommendations to integrate controls and improve efficiency.

A fraud risk assessment generally covers four key areas that include (1) Asset Misappropriation, (2) Financial Reporting, (3) Regulatory Compliance, and (4) Illegal Acts.

  • Financial and Non-Financial Reporting – Financial statement fraud can damage a corporate reputation, lead to loss of investor trust, and cause financial instability.  Inconsistency between financial and non-financial information can reflect internal fraud.  Such fraudulent activities include overriding internal controls, overstating revenues, understating expenses, or omitting relevant and material facts.

  • Asset Misappropriation – is more than theft or embezzlement.  Employees use company equipment for their personal benefit without approval and may engage in misappropriation and/or occupational fraud.  Company assets are subject to misappropriation and must be examined for potential skimming and fraudulent disbursements.

  • Regulatory Compliance – evaluate whether the proper fraud and whistleblower hotlines and resources are in place with regulatory requirements.  Hotlines are critical for fraud detection efforts.

  • Illegal Acts – Fraud is fundamentally an illegal act.  The fraud risk assessment is a tool for identification and detection of potential fraud.  A detailed data analysis of financial figures can reveal anomalies that may point to fraudulent activity.

Building a Strong Infrastructure

Performing regular fraud risk assessments is a cost-effective investment compared to the cost of fraudulent activity.  Global fraud schemes cause losses of more than $3.5 billion annually.  A fraud risk assessment is essential in helping you proactively identify external and internal risks that can have a major impact on your business reputation, which could expose you to criminal or civil liability.  In some cases, it may jeopardize the loss of revenues and assets.  A fraud risk assessment addresses a number of key areas that include asset misappropriation, financial and non-financial reporting, regulatory compliance areas, and illegal acts.

Benefits of Risk Fraud Assessment

Establish a governance structure

Helps to understand their susceptibility to fraud

Helps businesses uphold their integrity
Helps businesses minimize financial losses