Risk Management and Assessment

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Fraud Risk Student’s Name Institutional Affiliation Date Risk Management and Assessment Financial auditing is an integral part of any business management. It is in charge of facilitating the communication of financial position of a company. In simple terms, it involves setting up, maintaining and reviewing financial records of a given company to understand its financial position. It is therefore essential that financial auditing provide a fair representation of the financial position of a company when disclosing important financial reporting. Without strict audit regulation, stakeholders of these companies are susceptible to risk fraud. Types of Fraud Risks Fraud Triangle According to Dr. Donald Cressey in his research on criminology in fraudster behaviors, he came up with three main conditions that stimulate the fraud. One of the factors is the personal motivation and decision of the person who intends to perform the crime. Secondly, is the returns or rather the returns that the person committing the crime will get. Finally, there must exist the opportunity to get involved in the criminal activity. Pressure Pressure is the primary cause of a person to commit fraud. It is often financial, such as the incapability to pay bills such as medical, fees and the like, an addiction to drugs, alcohol, gambling or the desire to possess expensive luxury items. However, some frauds are committed merely out of greed. There are no pressures involved except the desire to gain wealth. Opportunity When preventing fraud, having an opportunity is the most important factor that should be considered. If a company eliminates chances for fraud to be committed, then it can

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