Risk Assessment

Risks in Finance,
Reason of Risk
Treasury and Accounting Consequences Probability Impact Control
Exposure
Department
- Maintain a
reimbursement
policy or guidelines
Employees could
- Require original
embezzle the funds Employees
documentation
for personal might be tempted
Expense Reimbursement - Initiate a formal
expenses by to do fraudulent Likely High
Fraud review process
falsifying or acts which result
- Routinely question
manipulating to company loss.
expenditures
receipts
- Have all
disbursements made
in a formal manner
Cumulative loss
This type of fraud over a year of - Separation of
might be one or more payroll duties.
Ghost Employee Frauds committed over an ghost employees Possible High - Reviewing of
extended period of can create a high payroll reports on a
time. impact on the periodic basis
entitys image
- Review request
Delay or non -
approval in weekly
Non approval or delay of approval of Employees
basis.
providing supplementary supplementary intrinsic
- Set policies and
funding resulting to funds can decrease motivation might Unlikely Moderate
procedures
ineffective performance of the effectiveness of be affected
regarding approval
the specific department. the departments negatively.
of supplemental
productivity
funds

Customers, who
- Seek information to
are computer
Faulty communication to the customer if they
illiterate, might not Delay in
customers by not issuing Rare Low need hard copy of
be informed of payment of fees
statement of accounts their account
their account
balances.
balances.

Continuous error
- Set policies and
Unreliability of the may result to
Increase in budgeting errors procedures about
budget forecast loss of resources
due to employees Unlikely Moderate punishment for
might continuously for other
rationalization employees
occur. facilities or
unproductivity.
departments

Risk 1 - Expense Reimbursement Fraud

Risk 2 - Ghost Employee Frauds
Risk 3 - Increase in budgeting errors due to employees rationalization
Risk 4 - Non approval or delay of providing supplementary funding resulting to ineffective
performance of the specific department.
Risk 5 - Faulty communication to customers by not issuing statement of accounts

Risk Matrix

RISK MATRIX

Likelihood

Almost Certain
R1
Likely
R2
Possible
R3,R4
Unlikely
R5
Rare

Negligible Low Moderate High Extreme