ABSTRACT
One of the most interesting and rewarding parts of a Fraud Risk Manager’s job is to assist managers and employees to understand why fraud happens and how it affects them. This is particularly important when managers think that it cannot happen within their business and therefore believe that they should not waste their time doing an assessment. This chapter presents an approach which is based on internationally accepted principles of risk management. There are numerous risk management standards, frameworks and methodologies. It is fundamental when assessing fraud risks to be aware that human interactions are involved. Each organisation comprises individuals, both internal and external, with unique personalities. Risk management standards usually state that risks should be analysed in terms of likelihood and consequence and lay down some fundamental steps that should be followed in the risk assessment process. They do not prescribe any firm rules as to how the likelihood and consequence should be calculated.
