8.10

Risk Assessment

Principle 8 - Assess Fraud, Improper Payment, and Information Security Risk

Attribute 8.10 - Management considers fraud risk factors. Fraud risk factors do not necessarily indicate that fraud exists but are often present when fraud occurs. Fraud risk factors may include the following:

• Incentive/pressure - Management, other personnel, or external parties have an incentive or are under pressure, which provides a motive to commit fraud.⁵⁹
• Opportunity - Circumstances exist, such as the absence of controls, ineffective controls, or the ability of management to override controls, that provide an opportunity to commit fraud.
• Attitude/rationalization - Individuals involved can rationalize committing fraud. Some individuals possess an attitude, character, or ethical values that allow them to commit dishonest acts knowingly and intentionally.