Risk management
Risk management

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Risk management

3.4 Human factors and internal controls

Internal controls are a widely used component of most risk management systems. But controls that rely on people can sometimes fail.

Of a more sinister nature, deliberate deception or fraud can cause an otherwise high-performing risk management system to fail. Failing to identify risks or to properly assess them, or deliberate subversion of controls for fraudulent purposes, can lead to a risk system failing to operate correctly – fraud effects all organisations, to a greater or lesser extent, and it is something that should be guarded against.

To guard against an individual committing fraud it is common to have ‘segregation of duties’ – this simply means that more than one person is involved in carrying out a task. An example is paying a supplier. Segregating duties would involve one person raising the invoice and another person paying the invoice. Segregation of duties can be subverted (got around) when people collude. For this reason an independent oversight (e.g. by internal audit) is necessary, even when, at face value, appropriate controls are in place.


Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371