Home > Five things that need to be reviewed when conducting a fraud assessment

Five things that need to be reviewed when conducting a fraud assessment


A new research paper released recently by the Independent Broad-based Anti-corruption Commission (IBAC) highlights the need to assess corruption risks in government and business to manage public perception and ensure the highest level of integrity in the public and private sector.

IBAC’s research paper ‘Perceptions of corruption in Victoria’ analyses the corruption risks within the Victorian public sector. 

Warwick Spargo, director, RSM Bird Cameron explains that they are often hired to conduct fraud assessments and review fraud frameworks. The major areas of suspected corruption include conflicts of interest, expenses and use of advantage in relation to employees taking from employers and relationships with third parties. 

The IBAC report also highlights the perception of hiring friends and family for public service jobs and contractor appointments, particularly in the government space. The public sector across Australia is pushing to downsize largely through decreasing permanent positions and outsourcing work to contractors. 

Mr Spargo adds there is a concern that permanent employees who resign or are made redundant will then become contractors on more money due to a lack of clarity around how these contractor appointments are made. The same can be said for the private sector. 

However, he believes having a fraud framework in place and conducting regular fraud assessments helps ensure clarity and transparency in areas that can be perceived as high risk for corruption. 

Five things that need to be reviewed when conducting a fraud assessment 

1. Make sure there is transparent fraud framework. This should include an overarching attitude of zero tolerance from senior management to set the right example. 

2. Improve staff awareness. Implement fraud training including annual staff surveys and anonymous reporting. Use probity professionals and techniques to train staff in their interactions with external parties. 

3. Have strong internal controls including the segregation of duties to avoid potential conflicts of interest or use of advantage. 

4. Conduct regular fraud assessments. Appoint a responsible person to identify areas of the organisation that have the highest risk of occurrence of fraud. 

5. Ensure there is regular monitoring of fraud risk. This includes conducting internal audits and setting up an audit committee to manage the process. 

Newsletter sign-up

The latest products and news delivered to your inbox