COSO Internal Control - Integrated Framework (2013) P8: Principle 8: Assesses fraud risk

When assessing risks to its objectives, the organization considers the possibility of fraud. Points of focus (4). Types of fraud: the assessment covers fraudulent reporting, loss of assets and corruption, and the ways fraud and misconduct could happen. Incentives and pressures: the assessment weighs the incentives and pressures that might lead to fraud. Opportunities: the assessment weighs the scope for acquiring, using or disposing of assets without authorisation, altering reporting records, or other improper acts. Attitudes and rationalisations: the assessment considers how managers and staff could engage in improper conduct or justify it. Approaches the framework suggests for external financial reporting: performing fraud risk assessments; considering how controls might be circumvented or overridden; building fraud risk into what internal audit plans to cover; using IT tools; reviewing the incentives and pressures created by compensation programmes.