Investigation of corporate fraud

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P od fraud is understood as malicious illegal actions that consist in the misappropriation of property by abuse of the owner's trust or by knowingly transmitting false information for the purpose of illegal enrichment. Corporate fraud for a company means the withdrawal of profits and / or a lack of income for the goods sold or services provided.

Corporate fraud will be indicated by the following characteristics:

  • decrease in the efficiency of the enterprise;
  • decrease in sales volumes;
  • increase in receivables, problems with repayment;
  • increase in the cost of goods (services) sold;
  • the absence of concluded contracts, despite the ongoing negotiations;
  • staff turnover;
  • increase in the number of profitable contracts during the reporting period;
  • a sharp increase in costs, incomparable with profits.

Types of corporate fraud

There are two forms of corporate fraud.

The external form involves the execution of unfavorable agreements, as a result of which an official receives personal illegal remuneration. External fraudulent schemes also include the transfer by an insider of information constituting a trade secret.

An internal form of fraud means employees use the authority to gain personal gain. Such fraud is varied in its manifestations. These are, for example, the theft of company assets, re-registration of securities and corruption.

Fraud investigation

At the first stage of the investigation of illegal actions within the company, a commission is created. Her job is to collect documents confirming the fact of corporate fraud: originals or notarized copies.

After collecting the documents, the audit stage begins with the involvement of outside experts. Based on the results of the check, the experts draw up a conclusion in which they record the fact of fraud, confirmed by the collected documentary evidence.

After the audit, the director of the company draws up and submits a statement of the incident to the law enforcement agencies, on the basis of which criminal proceedings are initiated. After that, an investigation is carried out to confirm or deny the fact of corporate fraud. Employees suspected of committing illegal actions are most often suspended from work during the investigation.

"Portrait" of a corporate fraudster

In 2017, the international audit company KPMG summarized statistics and created a portrait of a modern corporate fraudster.

Gender : 70% of the fraud was committed by men. The average damage caused by male scammers is $ 100,000 higher than the damage caused by female scammers.

Age : 53% of frauds were committed by criminals between the ages of 31 and 45. The amount of losses directly depends on the length of service of the employee: the largest scams fell on employees over 60 years old.

Education : Losses from fraudulent activities of employees with higher education are twice as high as losses from actions of employees with secondary and special education.

Position : 80% of corporate fraud incidents involve accounting, sales, customer service, procurement, and finance.

Anti-Fraud Preventive Measures

Corporate fraud is akin to software virus. Like antivirus, detecting corporate abuse begins with detecting suspicious activity. A full range of "anti-fraudulent" measures includes investigating committed or ongoing fraud, identifying vulnerabilities in the economic and information security system, ensuring the protection of confidential data and valuable company assets in real time.

To ensure high-quality protection of the company from corporate manifestations of fraud, the introduction of special technical equipment and software that monitors and analyzes the activities of employees during the working day allows.