What is a key method auditors use to manage moderate-to-high fraud risks?

Mapping existing preventive and detective controls is essential for managing moderate-to-high fraud risks because it allows auditors to gain a comprehensive understanding of how current measures are functioning to mitigate potential fraudulent activities. By assessing the effectiveness of existing controls, auditors can identify any gaps or weaknesses that might be exploited by fraudsters. This proactive approach enables organizations to enhance their fraud prevention strategies and ensure that there are robust mechanisms in place to detect and respond to fraudulent activities.

Furthermore, understanding current controls provides a baseline for future improvements and helps in allocating resources more effectively, ensuring that the most critical areas of risk are addressed. This systematic examination of controls is foundational to the overall risk management process within an organization, enabling auditors to tailor their audit strategies and increase the likelihood of detecting and deterring fraud before it can cause significant harm.