Page 33 - IIA MAGAZINE_March 2017_English

TO COMMENT on the article, Fraud Risk
EMAIL the author at dr.kmousa@gmail.com

Therefore, this shows the role of the 2. Does the organization have a clear through the existing internal control
internal audit in the supervision in order anti-fraud strategy, for example a methods and evaluate the design and
to monitor progress of the investigations policy that coordinates the ongoing effectiveness of such methods (for
to help in ensuring that the organization activities to reduce and detect fraud? example, powers, credit, separation of
follows the relevant policies, procedures, duties, etc.)?
and applicable laws and legislation (where 3. Does the organization conduct 8. Are there effective channels to
the internal audit is not responsible for through examination for the enhance the flow of information with
conducting the investigations), in the backgrounds of new potential quality whether top down or vice
identification of misappropriated assets or employees? Are the investigations versa across the organization?
the assets related to the investigation, as and inspection of the employees who 9. Are training and awareness of cases
well as in supporting the organization in are promoted to higher positions of fraud and corruption for all
its legal, insurance and other procedures conducted? employees provided? Is the training
through the evaluation of and control regularly held and promoted in the
over the organization’s practices and 4. Is there a process for the organization?
plans to report on investigations, whether documentation of registration, 10. Are there sufficient, regular and
internal or external, and monitoring the tracking and response to all the ongoing procedures to ensure
implementation of improvements in the allegations or suspicions of a crime that the Senior Management took
control methods to ensure their efficiency (for example reporting violations and into consideration how effective
and effectiveness. fraud hotline)? the control environment and risk
The role of internal audit can be summed assessment are and how much
up in the evaluation of how sufficient 5. Is there a regular evaluation of the modification or update the control
the fraud risk management is in the orientations, incentives, pressures and methods that reduce fraud risk may
organization through asking the following opportunities to commit the crime need?
questions: across the organization?
1. Do the Board of Directors and
6. Does the organization have
the Audit Committee have clear categorization for the potential fraud
responsibilities regarding the fraud and its effect on the organization
risk management? through an evaluation of all the types
of fraud risk including bribery and
money laundering?

7. Does the organization evaluate
whether the risks are reduced

For more information, please use the following references:

• Association of Certified Fraud Examiners, “Report to • Price water house Coopers LLP, “Fraud in a Downturn A
the Nation on Occupational Fraud and Abuse”, Global review of how fraud and other integrity risks will affect
Fraud Study, ACFE, 2016. business in 2009”, a limited liability partnership in the
United Kingdom, 2009
• Coderre, D, “Internal Audit Efficiency through
Automation”, The Institute of Internal Auditors (IIA), • The Institute of Internal Auditors (IIA),”Auditor s
John Wiley & Sons, Inc, 2009. Responsibilities Relating to Fraud Risk Assessment,
Prevention, and Detection”, Practice Advisory 1210.
• Deloitte LLP, “Fraud Risk Management – providing A2-1, The International Professional Practices
insight into fraud preventive, detection and response”, Framework (IPPF), April, 2006.
Deloitte Touche Tohmatsu Private Limited, 2013

• HM Treasury, “Fraud and the Government Internal • The Institute of Internal Auditors (IIA), the American
Auditor”, Crown copyright, London, January, 2012. institute of Certified public accountants (AICPA) and
Association of Certified Fraud examiners (ACFE),
• KPMG, “Fraud Risk Management Developing a strategy “Managing the Business Risk of Fraud: A Practical
for prevention, detection, and response”, KPMG Guide”, The IIA, AICPA, and ACFE, 2008.
forensic, KPMG LLP, 2013.

Dr. Khaled Mohamed Abdalla Mousa, Ph D, CFE

MARCH 2017 INTERNAL AUDITOR - MIDDLE EAST 33