Task 1: REVIEW QUESTIONS
Q1. What are four factors that influence the level of fraud risk faced by an organization?
Q2. What is the difference between preventive controls and detective controls?
Q3. What is the objective of a fraud risk assessment?
Q4. What can an effective fraud risk assessment help management to accomplish?
Q5. What characteristics constitute a good fraud risk assessment?
Q6. What are three considerations for developing an effective fraud risk assessment?
Q7. What can management do to prepare a company for a fraud risk assessment?
Q8. What steps are involved in conducting a fraud risk assessment using the sample framework discussed in the chapter?
Q9. Describe four approaches for responding to an organization's residual fraud risks.
Q10. What are four important considerations to keep in mind when reporting the fraud risk assessment results?
Q11. What actions can management take to make the most impact with the fraud risk assessment?
Q12. How can a fraud risk assessment inform and influence the audit process?
Task 2: DISCUSSION ISSUES
Q1. How is fraud risk influenced by a company's internal control? How is fraud risk influenced by a company's ethics, values, and expectations?
Q2. Why is it important that management and auditors collaborate on a fraud risk assessment?
Q3. What qualities and characteristics should be considered when choosing a sponsor for a fraud risk assessment?
Q4. Green is an internal auditor and the lead on the company's fraud risk assessment. In the past, he and Blue, an accounts receivable clerk, have had several heated disagreements over accounting procedures. What risk would Green be taking by having Blue perform the fraud risk assessment work related to the accounts receivable department's activities? How might this risk be best addressed?
Q5. Who should be included on a fraud risk assessment team?
Q6. What topics should be discussed in identifying fraud risks that could apply to the organization?
Q7. What risks related to each of the three primary categories of fraud should the fraud risk assessment team consider?
Q8. What risks should the fraud risk assessment team consider in addition to the specific risks related to each of the three primary categories of fraud?
Q9. When might an organization choose to avoid a risk rather than assuming, transferring, or mitigating it?