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Motive
Page 27
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• Be wary of false accounting. Particular attention should be paid to relatonships between the sales team and the customers, with management looking at year-end sales teams behaviour and the post-year-end issue of credit notes.
• Review your bonus structure. Fraudsters rationalise to themselves that their performance is worthy of reward. Ensure your bonus structure is fair, transparent and aligned to the behaviours you wish to reinforce.
Opportunity
t Consider remote locations. There is often a link between fraud and the distance from head office. For example, in a London-based organisation, a small, seemingly profitable, regional depot will often get less management attention and therefore the opportunity to commit fraud increases.
• Focus on areas where procurement fraud is possible. Is your workshop receiving all the goods and services it pays for?
• Assess IT vulnerability. Fraudsters use widely available tools, such as keystroke loggers, to obtain sensitive data such as PIN numbers and passwords. Appropriate administrative controls and passwords, prevention of unauthorised software installation, restrictions on USB ports and other measures can reduce risks.
Indicator
• Don't neglect over-performance. If something is too good to be true, it usually Is. When you are assessing the performance of a business or an individual within it, make sure you pay adequate attention to over-performance.
• Review changes to the supplier master file. This is part of a computerised accounts payable system where data is held on suppliers, including their bank account details. It is very important that an exception report is produced of any changes to standing data on the supplier master file.
Monitor your car park. Although it is stupid to flaunt your ill-gotten gains at work, most fraudsters do. Pay close attention to the cars parked outside and consider if the salary you pay certain managers warrants the vehicles they Owe.
It Perform background checks when hiring. Don't give those with a flawed history the chance to commit fraud in your company. More than half of applicants lie on their CV, so pre-employment screening to detect falsehoods can prevent poor recruitment decisions,
Pay attention to morale. Fraudsters are often dissatisfied with their work and rationase their entitlement to further reward.
* Investigate high staff turnover. It is very hard to be a whistle blower at work. It is much easier to polish your CV and look for another job. Management should pay particular attention to those areas of the business that have a high staff turnover. It is good policy to have a system of exit interviews for staff in place, enabling them to tell you about concerns that they may not have raised before deeding to leave the organisation.
Fraud will never disappear. That doesn't mean you cannot combat it. Ensure your staff know fraud will be investigated, which will go some way towards protecting your business.