Title Page

  • Client / Site

  • Location
  • Conducted on

  • Prepared by

Fraud Risk Assessment

  • Is ongoing anti-fraud training provided to all employees of the organization?

  • Do employees understand what constitutes fraud?

  • Have the costs of fraud to the company and everyone in it — including lost profits, adverse publicity, job loss and decreased morale and productivity — been made clear to employees?

  • Do employees know where to seek advice when faced with uncertain ethical decisions, and do they believe that they can speak freely?

  • Has a policy of zero-tolerance for fraud been communicated to employees through words and actions?

  • Is an effective fraud reporting mechanism in place?

  • Have employees been taught how to communicate concerns about known or potential wrongdoing?

  • Is there an anonymous reporting channel available to employees, such as a third-party hotline?

  • Do employees trust that they can report suspicious activity anonymously and/or confidentially and without fear of reprisal?

  • Has it been made clear to employees that reports of suspicious activity will be promptly and thoroughly evaluated?

  • Do reporting policies and mechanisms extend to vendors, customers and other outside parties?

  • To increase employees’ perception of detection, are the following proactive measures taken and publicized to employees?

  • Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?

  • Does the organization send the message that it actively seeks out fraudulent conduct through fraud assessment questioning by auditors?

  • Are surprise fraud audits performed in addition to regularly scheduled audits?

  • Is continuous auditing software used to detect fraud and, if so, has the use of such software been made known throughout the organization?

  • Is the management climate/tone at the top one of honesty and integrity?

  • Are employees surveyed to determine the extent to which they believe management acts with honesty and integrity?

  • Are performance goals realistic?

  • Have fraud prevention goals been incorporated into the performance measures against which managers are evaluated and which are used to determine performance-related compensation?

  • Has the organization established, implemented and tested a process for oversight of fraud risks by the board of directors or others charged with governance (e.g., the audit committee)?

  • Are fraud risk assessments performed to proactively identify and mitigate the company’s vulnerabilities to internal and external fraud?

  • Are strong anti-fraud controls in place and operating effectively, including the following?

  • Proper separation of duties

  • Use of authorizations

  • Physical safeguards

  • Job rotations

  • Mandatory vacations

  • Does the internal audit department, if one exists, have adequate resources and authority to operate effectively and without undue influence from senior management?

  • Does the hiring policy include the following (where permitted by law)?

  • Past employment verification

  • Criminal and civil background checks

  • Credit checks

  • Drug screening

  • Education verification

  • References check

  • Are employee support programs in place to assist employees struggling with addictions, mental/ emotional health, family or financial problems?

  • Is an open-door policy in place that allows employees to speak freely about pressures, providing management the opportunity to alleviate such pressures before they become acute?

  • Are anonymous surveys conducted to assess employee morale?

Completion

  • Name and SIgnature of Risk Manager or Compliance Manager

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