What is the first step in establishing a fraud risk management process?

The first step in establishing a fraud risk management process involves developing and implementing a fraud risk policy. A well-defined fraud risk policy establishes the groundwork for the entire framework by outlining the organization's commitment to preventing, detecting, and responding to fraud effectively. It creates a baseline for expectations regarding ethical behavior, accountability, and compliance with laws and regulations.

By having a policy in place, the organization can then proceed to assess current fraud risks, train employees on fraud awareness, and conduct a fraud risk assessment. These subsequent steps become more effective and targeted when guided by a comprehensive policy that directs the organization's overall approach to fraud risk management. Therefore, starting with a policy is essential for shaping the structure and priorities of the entire fraud management process.