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Managing the Business Risk of Fraud: A Practical Guide
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As noted, fraud is any intentional act or omission designed to deceive others, resulting in the victim suffering a loss
and/or the perpetrator achieving a gain. Regardless of culture, ethnicity, religion, or other factors, certain individuals
will be motivated to commit fraud. A 2007 Oversight Systems study5 discovered that the primary reasons why fraud
occurs are “pressures to do ‘whatever it takes’ to meet goals” (81 percent of respondents) and “to seek personal
gain” (72 percent). Additionally, many respondents indicated that “they do not consider their actions fraudulent”
(40 percent) as a reason for wrongful behavior.
Only through diligent and ongoing effort can an organization protect itself against significant acts of fraud. Key
principles for proactively establishing an environment to effectively manage an organization’s fraud risk include:
Principle 1: A s part of an organization’s governance structure, a fraud risk management program6
should be in place, including a written policy (or policies) to convey the expectations of the
board of directors and senior management regarding managing fraud risk.
The Institute of Internal Auditors - Organizational Body
NONE
Managing the Business Risk of Fraud: A Practical Guide
Management
English
2011
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