According to MA (Management Accounting) guidance and internal auditing standards, when assessing the likelihood of fraud risk, internal auditors should consider historical data and patterns within the organization. Past fraud allegations and actual occurrences provide valuable insights into potential vulnerabilities and areas where controls might have previously failed. This historical perspective helps in evaluating the current fraud risk environment and in identifying areas that require stronger controls or more vigilant monitoring.
Reference:
IIA Practice Guide: "Assessing the Risk of Fraud"
COSO (Committee of Sponsoring Organizations of the Treadway Commission) Fraud Risk Management Guide