Fraud and Internal Audit – Assurance Over Fraud Controls, Fundamental to Success

Every  year  billions  of  dollars  are  lost  to  fraud  and  corruption resulting  in  inefficiencies, aborted projects,  financial  challenges,  and in extreme cases organizational failure.  Often  fraud  occurs  because  of  poorly designed controls and weak governance undermining the organization’s processes. Organizations should have robust internal control procedures  to  limit  the  risk  of  fraud, and internal audit’s role is to assess these controls.

In a new position paper from the Institute of Internal Auditors, “Fraud and Internal Audit: Assurance Over Fraud Controls Fundamental to Success,” the IIA discusses the responsibilities of internal audit in preventing and detecting fraud at organizations.

Managing fraud risk is something every organization faces. Governing bodies and executive management can help clarify roles in fraud risk management, including internal audit’s role. Here are five key questions the governing body should be asking:

  1. Does the organization have a fraud response plan in place that outlines key policies and investigation methodologies?
  2. Who carries out fraud investigations within the organization?
  3. Is internal audit tasked with identifying where fraud risk is present, and does it audit controls in these areas?
  4. When fraud has occurred, does internal audit investigate to understand how the controls failed and how they can be improved?
  5. Is internal audit tasked to investigate fraud, and, if so, does it possess the proper skill sets to carry out such investigations?

Fraud is never a pleasant thing to suspect or uncover. If an organization does suspect that fraud is occurring, it is important that solid evidence and accurate facts are found and documented. Whether you have uncovered a fraud, have received a tip that fraud happening or suspect that fraud is occurring, our team of Certified Fraud Examiners, Certified Internal Auditors, and Certified Public Accountants can conduct a review to determine the absence or presence of fraud indicators. We can also conduct a full internal review to determine the nature and extent of fraud that may have occurred.  Learn more about our Fraud and Forensic Services and connect with our advisors today!


Ms. Darlene Brown is a director with our Risk Advisory practice. She has more than 18 years’ experience in leading internal audits, SOX Section 404 compliance testing, internal control evaluation, operational performance reviews, and business process reviews. She has oversight responsibility for our co-sourced and outsourced internal audit services with a diverse clientele in all business sectors including state government entities, higher education, not-for-profit organizations, Fortune 500 companies, and public and privately held businesses. Connect with Darlene via email.