Definitions and Clarafication - Page 2

It is synonymous with, for example, enterprise, non-profit organisation, institution, entity, etc.…

Comprises the complete set of control measures to ensure achievement of the (strategic) objectives set by the organisation, within the defined preconditions such as cost levels, and observance of the agreements in effect and the valid procedures (compliance). The internal control set-up comprises: (a) the internal control system itself: what…

An internal code of conduct clarifies what is expected of everyone in the organisation, what can be expected of the organisation and what behaviour is and is not accepted. If the standards and values are clear to everyone, discussions are avoided and this clarity contributes to a better working atmosphere.…

A natural person, often also an accountant, who is employed by the organisation and professionally assesses the extent to which his organisation succeeds in controlling the business process and the associated risks. The internal auditor helps an organisation achieve its goals by evaluating and improving the effectiveness of the governance,…

A theory developed by the criminologist Donald Cressey (1953), which assumes that fraud requires three elements: pressure, opportunity and rationalisation. A fraudster experiences pressure or is motivated to commit fraud, considers himself capable of committing fraud based on the authorities of his position (opportunity) and justifies his intended fraud to…

The internal control measures should be appropriate within the organisation and effective in preventing and detecting the fraud risks identified via the fraud risk assessment in a timely manner. The primary responsibility for the prevention and timely detection of fraud rests with the organisation’s supervisory body and board. The board,…

The activities aimed at gaining a good understanding of the organisation and its environment,including its internal controls, to identify potential fraud risks. The assessment looks at the nature, scope and frequency of a potential fraud risk to evaluate the likelihood that it will actually occur.…

A kind of roadmap indicating how the board and supervisory body should act in a case of suspected fraud. When fraud is committed, a fraud response plan helps the organisation act appropriately and expeditiously to minimise damage to the organisation, in all its forms.…

Everyone in the organisation must know where, and how – e.g. verbally or by telephone/letter/ email – they can report a case of suspected fraud. Details of the fraud disclosure desk are provided in the internal code of conduct and/or the company regulations.…

An intentional act by one or more members of management, the supervisory body, employees or third parties, using deception to obtain an unlawful advantage. Fraud occurs in many forms. The main manifestations of professional fraud are misappropriation of assets, fraud in the financial accounts and corruption.…