Over the next few blogs, I will discuss the concept of a new model and a new approach to fraud risk assessment. Two things to note. First, you must be open-minded to change. Second, it is not my goal to say that what we are doing is wrong. As with so many theories, change is necessary. Fraud in companies has evolved and we must be willing to evolve along with it.
With that said, I will present my new model at the ACFE Global Fraud Conference in Boston, MA, on July 14, 2026. Since I am committed to presenting my ideas first at the ACFE conference, this blog will only outline some of them. I will wait until July to start explaining the New Model in detail here. The following are some of the items that will be discussed:
- Level of understanding of fraud risk for an auditor
- Dilemma between understanding fraud risk and documenting fraud risk
- Methodology for documenting fraud risk at a basic, intermediate, or advanced level
- Elimination of the inherent fraud risk concept
- Recognition of the inherent limitations of internal controls
- Challenge of the fraud risk mitigation principle
- Inclusion of vulnerabilities in the assessment
- New fraud management strategy
To be honest, the ACFE threw me a curveball. To the best of my recollection, the conference was always in June. So, for the last twelve months, I thought I was on target to start writing about the new approach in June. Oh well. ACFE is first. Maybe I will see you at the conference.
Fraud Trivia
The concept of "fraud risk assessment" developed over time within the auditing and accounting professions, primarily formalized in guidance documents from professional bodies.
- What was the professional standard that required a fraud risk assessment?
- What was an early step in formalizing the auditor's role regarding potential financial misstatements?
- True or False? Fraud is a broad legal concept, and auditors do not make legal determinations of whether fraud has occurred.
- The Fraud Risk Management Guide was published in what year?
- What is one of the most significant changes in fraud risk assessment as of today?
- True or False? Fraud makes its way into pop culture and social networks – creating more fraudsters and attacks.
Here are the answers to last month's trivia.
I hope you have enjoyed learning more about Dr, Cressey.
- What was the name of Donald Cressey wife maiden name? Elaine Smythe
- How many children did Donald Cressy have? Three
- What where the children’s names? Martha, Ann, and Mary
- Where was Donald Cressy born? Fergus Falls, Minnesota
- True or False? Cressey would be the first person in his extended family to
- complete high school. True.
- What profession did Cressey work at to put himself through school? Baking