Fraud risk management is a process by which organizations identify, assess, and respond to potential or actual incidents of fraud. It involves the identification of red flags, the assessment of risks posed by those red flags, and the implementation of controls to mitigate those risks.
Fraud risk management is a key component of an organization's overall risk management strategy. By identifying potential risks and implementing controls to mitigate those risks, organizations can protect themselves from financial losses and reputational damage.
Fraud risk management is not a one-time event; it is an ongoing process that should be revisited on a regular basis. As the business environment changes, so too do the risks posed by fraud. Organizations must continually assess their fraud risks and update their controls accordingly.