What is an organization’s assessment of the risks of being victimized by fraud known as?

The term that describes an organization's assessment of the risks of being victimized by fraud is known as a Fraud Risk Assessment (FRA). This assessment involves identifying potential points of vulnerability within an organization, evaluating the likelihood of fraud occurring, and understanding the potential impact that fraud could have on the organization. The FRA is a proactive approach, allowing an organization to implement measures to mitigate identified risks, enhancing its overall fraud prevention strategies.

A Fraud Risk Assessment is integral to effective risk management because it provides a framework for organizations to systematically evaluate their current controls and identify areas for improvement. By conducting a FRA, organizations can tailor their fraud prevention measures to address the specific types of fraud risks they are most likely to face, thereby reducing the odds and potential impact of fraud incidents.

In contrast, a fraud prevention plan outlines specific strategies and policies to prevent fraud, while a fraud detection report is focused on analyzing data for signs of fraud that may have already occurred. A compliance audit is generally concerned with adherence to regulations and internal policies rather than a specific assessment of fraud risk. Each of these concepts plays a different role in an organization's overall fraud management strategy, but the assessment of risks is distinctly characterized as a Fraud Risk Assessment.