addressing fraud risk management with facts
DESCRIPTION
Fraud is identified and caught with the aid of facts. Facts give a deeper understanding to what you could be looking at in your organization. Facts have also given rise to the mnemonic that Fraud is Always Committed by Trusted Souls. As simplistic as it may seem, it holds key to a potential trigger. Are you equipped with the necessary tools to address this challenge? Is your organization equipped with fraud Risk Management? Here are some quick slides to take you through what you need to have.TRANSCRIPT
- 1. Embedding Fraud Risk Management
2. Frauds occur due to Incentive or Pressure (68%)?Attitude orOpportunityRationalization(18%)(14%)2 3. and can encompass any industry Misappropriation of cash by fudging accounts or opening fictitious a/cBanking Frauds Withdrawal from deposit accounts through forged documents. Trading on incorrect positions or outstanding unmatched tradesTrading Frauds Errors in Booking and settlement of trades Account payable and Account receivable frauds Financial Frauds Easy access to blank checks, facsimile, and manual check preparation Unaccounted purchase order numbers or physical loss of purchase ordersSourcing & Procurement Frauds Vendor collusion with employees Access to card numbers esp. in customer service or for processingCredit Card Frauds Online misuse/Phishing Excessive inventory write-offs without documentation or approvals.Inventory and Production Frauds Consistent production overruns beyond sales demand and backlog orders3 4. resulting in reputational and financialdisruptionSource: Fraud Intelligence Report-2nd Quarter -2011 published by Mark Monitor4 5. How do we mitigate fraud? 5 6. Embed fraud in the risk frameworkBusiness ModelStrategicBusinessTechnology ObsolescenceChangeChange Management Market/ Geo-PoliticalCredit Reputation Industry Product development Counterparty Country Risks Pricing Data Protection, Business Information & Physical Security privacyContinuity Registrations & Taxations Enterprise and IPEngagement Legal & Contractual RegulatorySecurity Compliance Compliance Customer needs & ConcentrationExternal FraudPhysical & Execution Infrastructure EnvironmentalManagement Leadership & CultureOperationalEmploymentRisks Operation Efficiency Internal & WorkBusinessBusinessFraudplace Safety Interruptions Practices Knowledge capital 6 7. create deterrenceIDENTIFICATION FraudVendors/Detection Govt.Partners MITIGATION REVIEWFraudDeterrence FraudFraud PreventionResponseCustomersEmployeesCONTROL7 8. ... and have structured governance usingCulture & Policies Structure & Process Systems & Legislation CapabilitiesEnterprise Standards Control Definition across Internal Audit Team Cyber protectionOperational Policies functions Internal and external IT actDisciplinary PolicyControl Self Assessment Vulnerability Testing Data protection laws and & 3rd party review of Disciplinary ProcessgovernanceAwareness Programs & ControlsTraining Modules Analytics and Forensics Incident HandlingWhistle blower Domain & subject matter Scenario planning & expertiseCode of ConductTesting Trigger and red flags Internal Audit 8 9. Infosys approach to manage fraud Process Map of Risks for all businesses Failure analysis across functions1Set Triggers Key Risk IndicatorLikely ChangesLoss Approach Estimation andBenchmarks ConsequenceSeverity 3 Mode AnalysisLevel of Severity 4ControlLog review & Control Levels andCost of controldefinition Failure Analysis 2 reviewconsiderations Incident Inventory from past experience Process Level Risk Assessment and Mitigation9 10. Fraud management Maturity ModelMonitorCheckContinuousMonitoring andAuditingUsing Softwares Actthat trigger alertstechniques for -High valueand creates reports transactionsEstablishing pre for financialdefined values or processesattributes (RedFlags)Identify & PlanCreation of Fraud ManagementChecklist for the process andidentifying the fraud prone areasand implementing appropriatecontrols 10 11. To Summarize Embed the culture of risk within the organization Enable the organization to own risk Have a Risk Reporting mechanism where all employees can reportrisks they see Have an Incident Handling system that focuses on root causeanalysis rather than closure Have systems and analytics in place to monitor triggers and redflags 11 12. THANK YOUwww.infosysbpo.comThe contents of this document are proprietary and confidential to Infosys Limited and may not be disclosed in whole or in part at any time, to any third party without the prior written consent of Infosys Limited. 2012 Infosys Limited. All rights reserved. Copyright in the whole and any part of this document belongs to Infosys Limited. This work may not be used, sold, transferred, adapted, abridged, copied or reproduced inwhole or in part, in any manner or form, or in any media, without the prior written consent of Infosys Limited.