THE ROLE OF INTERNAL AUDIT IN FRAUD RISK MANAGEMENT: RISK-BASED APPROACH

Abstract

This article examines the role of risk-oriented internal fraud audit, its functions in the system of ensuring the protection of the organization from fraudulent activities. Much attention is paid to the analysis and distribution of fraud risk management functions between responsibility centers. The purpose of the article is to substantiate the role of risk-oriented internal fraud audit, the development of methodological approaches to fraud audit. The functions of internal audit to ensure the third line of defense according to the 3-LOD (The Three Lines of Defense) concept are specified. A methodology for assessing the effectiveness of fraud risk management in terms of their prevention and detection by internal audit is provided.