The cost of doing nothing: Ignoring fraudsters? Part 1

Fraud is an enterprise risk. It falls in the same realm as economic, supply chain, disaster, duty of care and regulatory risks, according to the Association for Fraud Examiners (ACFE). An awareness of this risk can get the attention of the CFO and others, and thus with proper positioning, can receive the resources to prevent and manage it effectively.

Evidence of this destructive act can show up across an enterprise – within expense reports, cash advances, Pcards, invoices, travel data, HR feeds, etc. “Red flags” can be proactively detected by companies who have visibility into data and the controls in place to manage employee spend across an enterprise.

“Fraudsters use multiple means to steal and pull off their schemes, and many fraudsters attack the company from multiple angles,” says Andi McNeal, CFE, CPA, Director of Research for the ACFE. “Fraudsters may need cash…so they might steal multiple gift cards or create a fake invoice with payment going to their bank account. There’s your red flag—uncovering an employee theft or fraudulent payment might unravel a larger scheme that puts the company at risk for a corruption scandal.”

Savvy companies who pull together various departments of an organization who plan, manage and oversee employee spend can often find the weakest links that enable fraud in the first place. Setting up proper audit rules, coding ways to spend money properly, using effective spend reports that identify trends and outliers and revisiting policies and procedures are a few ways professionals can help manage this enterprise risk.

See More: The cost of doing nothing: Tax troubles for guestimators (Part 2)