Fraud in The #Business Environment #Comes in All #Shapes and #Sizes

As a precursor to the upcoming FEI Summit session, this article provides context for the primary areas business leaders should examine when designing their own fraud risk assessment.

Fraud in the business environment comes in all shapes and sizes, and it can come from the most trusted and long term employees. With the advent of computer technology there are more intentional acts of theft and deception in the workplace than ever before.

At the upcoming FEI Summit in Houston, TX we will talk about the general overall environment many of us operate in today’s business world. It is important to have context when you are talking to business leaders and ownership about managing your business in a manner that protects the hard earned capital and reputation the organization has built over decades.

On an annual basis the Association of Certified Fraud Examiners publishes a Report to the Nations on the most recent available information on the topic. In 2017 they examined almost 3,000 cases and $7BB worth of fraud cases worldwide. We will review the findings of that report to provide you with some useful trends and patterns to use. This will help you in designing your risk assessment once you return to the office. We will talk about planning, detection, implementation of best practices, and technology.


When reviewing your organization to determine were the greatest weaknesses exist, you must understand the background, and motivation of the fraudster. Many times these perpetrators are long term employees who have run into difficult financial or family problems. When you couple that pressure with their knowledge of the weaknesses in your controls the opportunity is sometimes too great to look past for these individuals.

The larger your organization grows the more people and locations come into play to monitor and safeguard. There is no one size fits all fraud kit you can buy from the AICPA, but there are common practices that have shown results over the past decade.


There are many different systems, groups of assets and information that a CFO is responsible to protect against these fraudsters. We will talk about process and procedures that you can put in place in your organization to help detect these acts quicker and easier. According to the ACFE report 97% of the fraudsters made attempts to cover up what they were doing, either by falsifying documents or records in the information systems. That tells us there are clues to lead us to the perpetrator.

There are analytic tools that have become popular in detecting questionable data in your systems, and there are techniques and data comparisons you can perform on a regular basis to flush out other questionable documents and patterns.

Best Practices

The nice thing about the process is that many people have been working on the problem for years and have developed several tried and true techniques to help you in your business environment. Yes many of you have smaller staffs and training time and resources will always be a problem, but if the survey is half right you are at risk for losing two & half percent of your revenues to fraud.

Yes separation of duties can be challenging in a small team or non-profit environment. However there are ways to combat this situation. There are also several highly regulated industries that have had to invest in technology and training to prevent these events and we can learn from them.


As we try to make our organizations more cost effective and competitive in the global market place we are opening ourselves up to more entry points for the fraudsters to enter. Every entry point allows people from across the globe to insert a Ransomware virus into your system, to steal the credit card information from your customers, and personnel information that is stored in your payroll systems.

A major challenge organizations face is there are hundreds of different software manufactures specializing in all kinds of tools for every department in your organization. These tools go from CRM systems for Sales and Marketing, ERP systems for the Operations planning and logistics teams, and Accounting and payroll systems in the back office.

All of this, along with a data breach that lands your organization in the news and damages your reputation can cause many CFO’s to loss sleep. Attend Fraud from Within at the upcoming FEI Summit to begin to understand the environment you operate in, review your weaknesses, create a plan, and implement a dozen’s of best practices to help you sleep a little better.

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