IOD: Guidelines for the Audit Committee's assessment and response to the risk of fraud

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IOD: Guidelines for the Audit Committee's assessment and response to the risk of fraud

• 20 June 2025
• Auditing and Assurance
• South African Accounting Academy

Summary:

The Institute of Directors (IOD) has drawn attention to a document published on Guidelines for the Audit Committee's assessment and response to the risk of fraud.

Article:

Three conditions are found to increase the likelihood of fraud: “incentives and/or pressure, opportunities, and attitudes (e.g. lack of integrity, transparency, arrogance etc.)”. These conditions may be triggered by a myriad of factors, including some of the examples of fraud risk factors (as set out in Appendix A).

The following is discussed:

• What is the role of the audit committee?
• Audit committee approaches to fraud risk oversight
• The audit committee’s response to fraud risk
• Appendix A: Fraud risk factors

The original position paper was issued in March 2005.

Click here to download the 6-page document:

https://cdn.ymaws.com/www.iodsa.co.za/resource/collection/69268B39-7C83-4C6F-90E8-0642EDC63286/ACF_Position_paper_10.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• As a practitioner, you may need to advise your clients, who have audit committees, on their functions and what is expected of them by investors.
• The audit committee has wide ranging roles and bears significant responsibility in supporting the Board.
• Audit committees should be aware of guidance issued by regulators, such as the IOD.

Relevance to Your clients:

• The audit committee has wide ranging roles and bears significant responsibility in supporting the Board.

• Audit committees should be aware of guidance issued by regulators, such as the IOD.

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