Which of the following groups should NOT be a part of the risk identification process when assessing fraud risk within an organization?

• A. Internal management
• B. Unrelated third-party vendors with no business ties
• C. Board of directors
• D. External auditors

Answer: (B)

Verified step by step guidance

1. Understand the purpose of the fraud risk assessment process, which is to identify potential vulnerabilities to fraud within an organization.
2. Recognize that the groups involved in the fraud risk identification process should have a direct connection to the organization and its operations, as they are more likely to provide relevant insights.
3. Evaluate the roles of the listed groups: internal management, board of directors, and external auditors. These groups are directly involved in or oversee the organization's operations and governance, making them essential to the fraud risk assessment process.
4. Consider the role of unrelated third-party vendors with no business ties. Since they have no direct connection to the organization, they lack the necessary knowledge or context to contribute meaningfully to the fraud risk identification process.
5. Conclude that unrelated third-party vendors with no business ties should NOT be part of the fraud risk identification process, as their involvement would not add value to assessing fraud risks within the organization.