Managing Fraud Risk by Preventing, Detecting, and Responding to Fraud was the learning objective for the Masterclass by Iyad Mourtada for the Institute of Internal Auditors Qatar held recently at Hyatt Regency Hotel.
The trainer, Iyad Mourtada, CFE, started his career in Chicago, USA. In 2011, he moved to the Middle East and began OpenThinking Academy, specializing in anti-fraud and audit courses. He is an ACFE Authorized Trainer in the GCC teaching the CFE Exam Review Course, and more than 3,000 ACFE members have passed the CFE Exam with him.
Mourtada started his presentation by bringing the context with staggering fraud data. $1.4 trillion is lost annually to scams; cybercrimes are estimated to cost the world $8 trillion in 2023, and perpetrators are 43% external, 31% internal, and 26% combination. The percentage of fraud cases involving corruption is on the rise from 31% in 2012 to 50% in 2022. Further, fraudsters are evidently collaborating as single-person fraud instances are 42%, whereas multiple-person cases are 58%, a reversal of the situation compared to 2012. The top three types of fraud are cybercrimes, customer fraud, and asset misappropriation.
The Committee of Sponsoring Organizations (COSO) and the Association of Certified Fraud Examiners (ACFE) released the Fraud Risk Management Guide-2023, which offers a blueprint for establishing a Fraud Risk Management Program. The guide gives guidelines that include recent anti-fraud developments, revised terminologies, and important information related to technology developments – specifically data analytics.
The Fraud Risk Management guide brings out the Control environment, Risk assessment, Control activities, information and communication, and Monitoring as the core framework. The four facets of fraud prevention, detection, response, and deterrence need resolution through legislation, risk management, corporate governance, and ethical culture.
“Use nudges to complement traditional methods of risk management,” Iyad stated from a practitioner’s viewpoint. Organizational culture goes beyond compliance programs. “There should be a high level of top management commitment to fraud risk management, tone at and conduct from the top,” mandated Mourtada as essential success criteria.
The implementation involves documenting the Fraud Risk Management program, communicating it at organizational levels, establishing a whistle-blowing policy, and using the right data analytics tools. “Don’t assume, Know. Acquire fraud risk intelligence, a mental capability to identify, assess, evaluate, and manage frauds,” Iyad emphasized.
“It is impossible to eliminate all frauds. However, fraud risk should be managed. Also, fraud is not static. We must keep updated on Fraud risk management, deterrence, control frameworks, data analytics, and legal and regulatory changes. The Fraud Risk Management Guide is a must-read publication for auditors who are involved in fraud deterrence. It is an indispensable subject for internal audit professionals,” said Sundaresan Rajeswar, the IIA Qatar Board member who coordinated the event.
Girish Jain, seminar chair, opened the meeting, Rajeswar welcomed the gathering, Christian Adonis spoke during the closing session, and Aisha Rafique liaised with the speaker. Over 100 members attended the training.
