The level of fraud has increased by 7 times since 2003 in the UK and doubled last year, which cost the country nearly £2 billion according to FraudTrack. It is predicted by experts that due to the economic downturn, it will only get worse with cyber crime and internal fraud most likely to be the areas that grow the fastest.
Despite of the huge rises in statistics, many companies, particularly the private sector ones, are continuing to ignore the subject. Company leaders do no want to proactively tackle fraud, instead choosing to react only after it has occured and major losses have been made.
Well known camera firm Olympus is the latest high profile victim of fraud. As a result of fraud it it’s accounting department, the organisation lost $1.7 billion and is under investigation in the USA, UK and Japan by law enforcement agencies. The huge fraud was only uncovered when the organisation’s formed CEO spotted that Olympus had paid huge fees for consultancy regarding an aquisition.
This example may be at the extreme end of the scale, but organisations from small to large will often bury their heads in the sand like an ostrich and think ‘it will never happen to us’. It is an unfortunate fact that every company or organisation can be the victim of fraud, including fraud by it’s staff. They all need to think proactively and take steps to ensure it doesn’t happen to them.
If you want to start tacking fraud in your organisation and stop the issue in it’s tracks, you need to consider the following:
- Who has access to your payment systems, when was the last time you even checked, are there any legacy names still on the syste,
- Do single individuals have control over the procurement process?
- When was the last time you examined the audit logs within your payroll and accounting systems to see if any important data had been changed? (Organisations often struggle with checking this annually, let alone checking it on a daily, weekly or monthly schedule)
- How many credit notes has your company issued recently and for what amounts?
- Who has made billing write offs and how many have there been?
Once you’ve answered these questions. The answers might be a scary wake up call
So, what can be done to prevent fraud by your employees in your company? First thing is that you need to have decent fraud detection, prevention and reporting systems in place. There are a number of software solutions in the marketplace that can help companies to identify fraud. These include Forensix which Advanced Business Solutions launched last year. The system aids in detecting fraud and can even help to identify fraud where multiple people are involved and working collaboratively. The system will set up to show any strange or meaningful activities such as the approval of new suppliers or credit notes being raised repeatedly
Analyists are predicing a huge upsurge in fraulent activity throughout 2012. It’s so important therefore that business leaders learn from high profile examples such as Olympus and look into a fraud detection and prevention to make sure that they don’t also become sitting ducks for the ‘F’ Word
Advanced Business Solutions offer business accounting software, business systems and fraud detection software