Practice Guide: Internal Audit and Fraud, 2nd Edition

The purpose of this practice guide is to increase the internal auditor's awareness of fraud risk, including the role the internal audit activity can play, and provide guidance on how to perform a fraud risk assessment at an organizational level. The IPPF requires internal auditors to consider the risk of fraud in their work. The internal audit activity must evaluate the potential for fraud and how the organization manages fraud risk, as per Standard 2120.A2.

Implentation of this guide is intended to:

• Increase the internal auditor's awareness and understanding of organizational fraud risk governance and management.
• Explain the various roles responsible for preventing, detecting, assessing and investigating fraud at the organizational level and how they interact using The IIA's position paper, The Three Lines Model.
• Describe the purpose and benefits of utilizing a fraud risk management framework, with specific reference to COSO's Fraud Risk Management Guide. 
• Explain the role the internal audit activity may play in the organizational's fraud risk management program.
• Identify the requirements for the internal audit activity to provide assurance on organizationwide fraud risk governance and management. These include:
  - Evaluating structures and processes for fraud risk governance.
  - Performing an organizationwide assessment of fraud risks.
  - Evaluating the design of the fraud risk management program.
  - Evaluating operationalization of the fraud risk management program.
  - Communicating results and assurance to senior management and the board.

The second edition practice guide supersedes Practice Guide "Internal Auditing and Fraud" originally issued in 2009.

This is for members only. To access it and other valuable resources, become a member today.