Intro Video Transcript

Hello everyone and welcome in on today session. Today we're going to be talking about fraud risk assessments. Now risk assessment is a typical word the most compliance professionals or auditors or lawyers who familiar well and organizations are becoming much more familiar with themselves also. The topic of progress assessment is something that shouldn't be new but it is considered one of the newer elements that people are now focusing on. Part of the focuses because COSEC 2013 the new framework that was released by the Committee of sponsoring organizations in May, the updated framework I should say, actually puts a very significant focus on organizations being able to appropriately assess the risk of fraud that may occur in their organizations and notice I said organisations not necessarily that internal auditor should do it or compliance professionals should do it. So this session is just signed to give you some thoughts in regards to what is her progress assessment things that you might want to think about forty organization when trying to determine how to go about performing of progress assessment and also to give you some ideas about the different levels of assessment the thorough there. So with that I will also referred to. I had one previous segment that really talked more about fraud on overall and fraud processes organizations should be using both to establish an anti-fraud program, evaluate for fraud, monitor for fraud, fraud red plaques are. So invite you to go out and look at that particular segment. It may help especially prior to viewing this particular segment. With that I'm your facilitator, my name Lynn Fountain. I'm a subject matter expert in areas as sarbanes-oxley, enterprise risk management, internal audit, fraud, governance and ethics and compliance. I have over 35 years’ experience from these various serious. I have been a past chief audit executive produced large international companies. In both cases have had the opportunity for the misfortune whatever you wanna call it basically execute on progress assessment but also to have actual incident fraud and in one incident I actually was involved with valuating a thirteen million dollar fraud that occurred over a seven-year period ended up complicating it over 20 internal employees and an end up getting passed to the FBI and the vendors that were involved in the fraud were indied. So it was quite an elaborate setup we weren't quite a bit about fraud and really the aspects of what people think and do in relationship to that. I am a published author. I am currently offering a book for the Institute of Internal Auditors Research Foundation on fraud and it's going to be called raise a red flag and its auditor’s tool really to setting up appropriate processes within their organizations to evaluate, monitor and manage typical fraud type investigations also a lot of fraud risk assessment processes so it's not really just for internal auditors but for all management, audit committee, boards and financial management better understand the implications of fraud. So I tried to look that. It should be out in 2015. I also will be offering a book that will be called the realities of performing the cheap honored executive role in today's economy that particular application will be out in later 2015 and it is being sponsored through a organization out of Canada. So, I invite you to look at that. My contact information is there on the screen and by to check out my website if you have any questions after viewing this webinar or any questions on any of the other webinar I have performed please recheck. I'm always happy to network and speak with people I think that's best when we learn. I do have several webinars how they're on some leading practice internal audit type processes as well as several different individual segments on COSEC 2013. So with that let's talk a little bit about what today's agenda. First come to talk a little bit about the fraud dilemma. Why do we still have tried in corporate America? Now I reviewed some of that in my last segment. So we won't go into that detail, will talk a little bit about the definition of fraud and what things are causing corporate white-collar fraud in today’s business. Then we'll get into really if you going to do progress assessment for your company where to start? What do you look at? How do you evaluate that? Is there preparations steps that you will need to do prior to even beginning in to a risk assessment? Then I'll talk a little bit about what are called macro progress assessment versus a micro blog risk assessment. If you've had experience in these areas you know that you can do a progress assessment at the very high Organization level and of course there is a very detail progress assessments that are done more in the process level at the process where you basically evaluate scenarios. Will talk about those a little bit. I'll show you some tools and templates that you might be able to use, again these will be further enhanced with in the book and the processes that I'm running well the Institute of Internal Auditors. So, I invite you to look for those when it comes out. Now as a brief introduction we're on the topic fraud continues to be on the radar of everyone, fast search radar of our stakeholders, our shareholders, our customers, even the community simply left then that's well as regulators of course. there's been a lot of fraud surveys out there I like to refer to one it's called The Kroll Advisory Board and they do a very good fraud anslysis almost across countries and it normally comes out in the latter part of every year sometimes around now October to November but from the recent survey said they found they did find that process to Crystal you can see it's still very significant corporate America. so we're always, will probably always gonna find fraud right out there and part of that is the psychology behind fraud when I went through my last webinar are you know everyone thinks different, everyone looks at things, different people have different motivations, different rationalizations as we talked about in last webinars, the fraud triangle and I introduced the fraud diamond, so there's a lot of things to consider and that's why it's important organizations to stay on top of what their risks from fraud. You know we hire good people, we hope they don't commit fraud but we never know what pressure and pressure points are put on this individuals. So it's good for organizations to think through their various processes, understand where their control sly, where the biggest risks are and what types of things could happen in their organizations. The other point is that we have ongoing technological advancement and that's creating just a whole new era of what projects can actually do, you know we have social media out there, we have the cloud and how it works and a lot of people don't understand the cloud and how it works. So there's a lot of new way that fraud loser are learning how to commit fraud and they seem to always be one step in front of the professionals. So it's important it says on the top of the radar for companies, executives and boards and that internal auditors in compliance professionals and just financial officials say aware of the implications they can be cost out there. So I want to come back to my definition of fraud find this in my last one but I want to reiterate it. if you look at the true definition you see that I have to work intentional underlined and if you talk to any lawyer out there they will tell you that fraud as an intentional act or omission designed to conceive others. Now in a court of law to proof a, fraud especially white-collar fraud your lawyer will tell you literally have to prove intent that the person that to see someone and that's why becomes very difficult for organizations they like to internally investigate fraud but sometimes if you're not walking the right processes and maintaining that appropriate communication with your legal people and if you don't know the proper steps to take you could actually be putting your organizational risk. so many organizations go out and get the forensic investigators who really know how to maintain that trail of evidence but it's again as we go through this and as we go through the process of when you think about risk assessing for fraud, keep in mind that fraud as an intentional act, it meant to deceive and the person meant to do it and that's an very important point.