The Association of Fraud Examiners (ACFE) published their Report to the Nations was published that analysed how corporate fraud is detected and how the methods of detection impact fraud.
Key themes that emerged was the following:
Data Monitoring and Surveillance Effective Detection Methods: The report found that data monitoring and surveillance were among the least used methods of fraud detection, but they had the most significant impact on reducing the duration and cost of fraud schemes.
In one of our earlier blogs, we discussed why data automation is not widely adopted by South African businesses, reasons such as lack of understanding, expense, and confidence in the analytics are discussed in more detail.
Relationship Between Fraudster’s Tenure and Fraud Risk: The ACFE report also examined how the length of employment of the fraud perpetrators affected the median losses they caused and found that frauds committed by employees who had been working for more than ten years were the costliest.
Red Flag Behaviour: Perpetrators of occupational fraud often display distinct behaviors that can serve as red flags for fraud. In 84% of cases, at least one red flag was present, with multiple red flags in 52% of cases. The most common red flag was living beyond one’s means (39%), followed by financial difficulties (27%) and close association with a vendor or customer (20%)
New Legislation for Preventing Corruption in South Africa: Section 34A of Prevention and Combating of Corrupt Activities Act (PRECCA) has been enacted introduces an offence by organisations for failing to prevent corrupt activities by associated individuals, such as employees or contractors.
Lifestyle 360 as a Solution for Fraud Detection and Prevention Corporate Insights has developed Lifestyle 360, a one-of-a-kind modular system that combines a big data universe with our own artificial intelligence and smart logic algorithms to identify and report red flag behaviour. It enables you to continually monitor, detect, act on, and prevent critical risks, both internally and externally.
Lifestyle 360 will allow you to protect your business from succumbing to the typical pitfalls that lead to fraud and corruption. It also comes with a host of additional benefits to ensure your organisation continues to operate optimally, free of the threat