A Quarterly Newsletter from the UAE and Oman member firms of the PKF International Ltd. network

VOL 19, Issue 2 April 2017

Fraud Risk Management

How we can help your business


No organisations are immune from risk of fraud. The current economic pressures have created an environment conducive to acting fraudulently. The economic downturn is changing the nature and scale of fraud risks that organizations face. The speed of change is such that opportunities to commit fraud will be prevalent.

Managing fraud risk has been a significant challenge for management in recent times. Regulators have long emphasised that fraud risk assessment is a critical component to mitigate the risk of fraud. Increasingly, a plethora of laws and regulations have been instituted by governments as a response to counteract corporate scandals and fraudulent practises and make organisations self-governing.


As organisations tend to be in compliance with these laws and regulations, none of these, however, are prescriptive on the design of controls to prevent the fraudulent acts. Therefore, increasingly management’s attention is focused on understanding fraud risk that can undermine their business objectives, whether fraud risk programs are operating effectively, how to reduce exposure to corporate liability and achieving high level of business integrity through corporate governance, internal controls and transparency.

Enablers of Fraud

  • Lack of internal controls
  • Lack of independent checks
  • Lack of management review
  • Lack of clear authority
  • Override of existing controls
  • Lack of employee fraud training
  • Lack of ethics
  • Collusion between employees and third parties
  • Poor tone at the top
  • Collusion between employees and management
  • Collusion between management and third parties
  • Lack of competent staff in oversight roles

How we can make a Difference?

Our fraud risk management services are focused on helping clients achieve the following:

  • PreventionLack: Design preventive controls to mitigate the risk of occurrence of fraud in the first place.
  • Detection: Design detective controls that would discover fraud when it occurs.
  • Response:Design corrective controls to take action to remedy the impact of fraud.

We work with clients to build an anti-fraud programme that essentially forms the key elements of fraud risk management framework:

Commitment: Set the tone by involving senior management to lead fraud risk management activities, and define authority and responsibilities to execute the role.

Assessment: Involve relevant stakeholders and plan fraud risk assessment to assess risk and develop a fraud risk profile.

Evaluation:Develop and document an anti-fraud strategy with emphasis on preventive controls to mitigate the fraud risks assessed.

How we can help Companies?

We help clients address fraud risk proactively by understanding where it occurs and develoing strategies to mitigate the risk. Our industry knowledge and experience coupled with fraud risk management framework will help us tailor our services to address your specific needs and include:

  • Developing fraud risk management program including a written policy (or policies) to convey the expectations of the board of directors and senior management regarding managing fraud risk.
  • Carrying out risk assessment to identify specific potential threats and events that the organization needs to mitigate.
  • Carrying out gap-analysis of specific business processes and identify areas that can create opportunities for fraud and establish internal control measures to prevent and detect fraud.
  • Establishing techniques to uncover fraud events when preventive measures fail or unmitigated risks are realized.


(This article has been compiled by our Associate Partner, Mr. Shajan Abraham.)