Download Free Entity-Level Fraud Risk Assessment Process Deliverable
The Sarbanes-Oxley Act (SOX) of 2002 requires public companies, among other things, to evaluate the sufficiency of controls in place to prevent and detect fraud within the organization. Specific to fraud, Section 404 of SOX requires that each company have a documented an on-going process to identify, assess and evaluate fraud risks related to internal control over financial reporting (”fraud risks”). Section 404 also clearly directs responsibility for the establishment and monitoring of such a process to Company Management and the Company’s Board of Directors and Audit Committee.
This document provides an overview of the process ABC Company management undertook to satisfy the requirements of SOX Section 404 related to the consideration and evaluation of fraud risk as it pertains to internal control over financial reporting. Management understands that this process is not a one-time event and must routinely update its assessment of such fraud risks facing the Company, annually at a minimum. The results of this assessment provide a point in time snapshot of fraud risks and their potential impact to the organization.
Risk Assessment Scope
In order to clearly define the scope of this risk assessment, the definition of key terms utilized throughout the course of this exercise are provided below
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