PERTROLANCE LLC
• INTERNAL AUDIT • FRAUD MANAGEMENT • COMPLIANCE
Fraud Management
FRAUD DEFINED
Any misrepresentation, either by misstatement or omission of a material fact, knowingly made with the intention of deceiving another and on which a reasonable person would and does rely to his or her detriment. (West Business Law)
WHO'S STEALING FROM YOU?
According to the Association of Certified Fraud Examiners, businesses on average lose ~ 5% of their revenue to some type of occupational fraud or abuse! Can your business afford to lose 5% of it's revenue? Imagine how long it would take to make that money back! (2010 ACFE Report to the Nations)
FRAUD? NOT AT MY COMPANY
Actually, we hear this a lot. Particularly in small businesses. This is one of the reasons that the ACFE found that small businesses are hardest hit by fraud. Many times small business owners are just to trusting. We hear things like: "we have an annual audit", "The accountants would catch it", "My employees are honest", "That would not happen here"... the list goes on. Unfortunately, many times we are called back to these same organizations at a later date to help with an investigation - after the fact and after the money is long gone. These statements are generally fallacies. If you remember one thing, remember this: audits catch fraud 4.2% of the time they are caught by ACCIDENT 9.3% of the time and through a tip 37.8% of the time (ACFE 2010 RTN). Don't rely on your auditor to detect fraud in your business!
You hear so many consultants talk about fraud management. So, what is it all about? Generally, it is a process that includes the following:
• Establishing policies and procedures that address fraud what is right and wrong and the consequences
• Identifying what type of fraud your organization is susceptible to (from both inside and out; industry specific; geographically specific etc...)
• Verifying that you have controls in place to prevent or detect the identified fraud schemes
• Training employees on what to look for and how to respond to possible fraud (according to the ACFE, tips are the most likely way fraud will be brought to your attention)
• Leading by example - management must act the way they want their employees to
• Creating a perception of detection to prevent fraud. People usually will not commit fraud if they think they will be caught.
Pertrolance can help you with Fraud Risk Management by providing the tools you need to be successful. These tools include:
• An employee survey to measure the control enviroment.
• A fraud susceptibility rating tool
• A catalog of fraud schemes and related controls to help benchmark your organization
• Fraud, ethics, and control training
• Fraud risk assessment meeting & interview facilitation tools
• Behavioral analysis tool
• Data analysis with specialized fraud queries
• Online project management tools
Contact Pertrolance today for more information about Managing the Risk of Fraud.
