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Your 10-point plan to tackle internal fraud and corruption

Jan 05, 2018
By David Carson and Barry Robinson

There are specific requirements all organisations should note in their formulation of a sound foundation for managing fraud and corruption risks. Such a foundation requires augmentation in respect of organisation-specific environments.

As a minimum, organisations should have all of the below measures in place. This list is not exhaustive and serves simply as a foundation for managing fraud and corruption risks. However, it should be helpful in putting you - and your organisation - on the right track.
  1. Embed an effective fraud prevention strategy: ensure that there is an approved fraud prevention strategy, protected disclosures policy, conflict of interest policy, anti-bribery and corruption policy and fraud response plan (including cyber-incident response), which are clearly articulated, implemented and communicated throughout  the  organisation.
  2. Implement a tiered approach: implement a three-tier approach to reducing fraud and corruption, which should include essential elements of prevention, response and detection.
  3. Effective fraud risk assessments: initiate ongoing fraud risk assessments (including the assessment of cyber-related risks), which are a non-negotiable element of mitigating the risks of fraud. These should be conducted at an enterprise and business unit level.
  4. Optimise the use of technology in detecting fraud: leverage technology in order to implement continuous control monitoring measures through forensic data analytics aimed at the early detection of fraud and corruption risk indicators.
  5. Assess employee awareness: conduct an annual online fraud health check survey among employees, which should ideally be anonymous in nature.
  6. Eliminate conflicts of interests: manage the risk of conflicts of interest through the implementation of an auditable declaration process where all declarations are assessed and verified.
  7. Manage relationships with external stakeholders: discourage/prohibit the receipt of gifts from suppliers as this alleviates the risk of potential irregularities and furthermore reduces the administration of any gift register.
  8. Know your business partners: supplier vetting should entail stringent verification and approval measures, including a conflict of interest declaration.
  9. Create awareness: fraud awareness and anti-fraud education should be consistently applied throughout the organisation on a continuous basis.
  10. Inform employees how to raise concerns: organisations should ensure that all employees know the policy for making protected disclosures under the Protected Disclosure Act 2014.
David Carson is a Partner in Forensics and Barry Robinson is a Director in Corporate Finance in Deloitte.