< Home > < Open Courses > < Outlines > Fraud The Invisible Enemy

FRAUD -THE INVISIBLE ENEMY How to prevent, detect and investigate fraud

Would you know if fraud was occurring in your organisation?
Do you know what the major fraud risks are in your business?
Does your organisation have a fraud prevention strategy?
Do you have a formal programme to tackle the risk posed by fraud?
Do you have the use of any automated fraud detection techniques?
If fraud is suspected do you have a clearly defined approach for managing the investigation?

If you have answered "no" to any of the above questions you are not alone.

Recent surveys have revealed that many organisations do not have a formalised approach to fraud prevention, detection or investigation. Furthermore most survey respondents stated that their staff did not receive any fraud awareness training.

• Many organisations rely on internal controls to prevent and detect fraud. This is unwise. The fraudster invariably knows your controls well and how to bypass them. (Global statistics on detected fraud 2000)
• Furthermore, in today's competitive environment internal controls have often been badly mauled as a result of "down-sizing", removal of management layers and employee empowerment
• Complacency, poorly applied procedures and the frenetic pace of change are the fraudster's main allies
• Add to this the ever-increasing reliance on technology, and it is no great surprise that fraud is escalating both in frequency and magnitude - in all industry sectors and all economies.
• The most worrying factor however is that fraud will be primarily committed by your own staff, and by those you probably trust the most
• One recent survey revealed that 84% of the worst frauds were committed by employees, nearly half of whom were managers with more than 5 years service.

This highly interactive 2 day course will enable participants to

1. develop a best practice fraud prevention programme, using the latest techniques,
2. understand and apply techniques to enhance fraud detection.
3. develop a successful fraud investigation strategy and clearly defined approach

Course Outlines

Day 1 - Understanding the Risks and Evaluating the Controls

Background

• Fraud explained: definitions and nuances
• Who commits fraud?
• Trends and statistics regarding detected fraud
• Why fraud is probably being perpetrated now in your organisation.

• 20 fraud case histories and the lessons to learn
• Public sector risks

• Building a picture of the major fraud risks in your organisation.
       An interactive case study

• The top 20 fraud indicators
• How to spot the danger signals
• Identifying the vulnerable areas in your organisation.

Evaluating current arrangements

• Why traditional internal controls are unlikely to prevent fraud.
• Putting yourself in the mind of the fraudster
• Examination of typical controls in place to mitigate the risks identified in the case study.
• Outline of a successful fraud prevention programme.

Creating a fraud control-consciousness loop

• Establishing and implementing effective anti-fraud policies
• Development of a fraud awareness training programme
• Communicating standards of expected behaviour /ethics
• The need for strong and consistent action when fraud is suspected or discovered.
• Security as a proactive prevention vehicle
• Electronic data and asset protection
• The relationship between fraud, risk and control
• The roles, responsibilities and liabilities of auditors, management, specialists and others
• Case Study

Aiming for a cost-effective balance between prevention and detection

• Use of management check-lists
• Company policy on consequences of committing fraud
• Facilitation of whistle blowing
• Pros and cons of external hot-lines
• Use of specialists to aid detection and investigation
• Preparing and implementing fraud contingency plans
• How to ensure fraud investigation is always given top priority
• Use of successful fraud investigation as a moral deterrent
• Managing the external coverage of proven fraud
  

Day 2 - Fraud detection and investigation

Fraud detection

• Fraud profiling - how to target the right systems
• Risk scoring
• Fraud Risk prioritisation
• How to get the information you need
• The use of data mining
• The use of Internal and external databases
• Other Government Sources
• Data Validation
• Automated fraud detection
• How to put the techniques into use in your organisation.

Internal audit programmes

• Designing proactive IA programmes
• Auditors fraud toolkit
• How to target fraud sensitivity by completing specific fraud audits

What to do when you suspect fraud

• Typical fraud scenario (exercise)
• How to decide who needs to be told
• Determining the objectives of the investigation
• Who should be involved - what skills do you need?

What to do next

• Determining roles of Security, Internal audit etc
• How to respond to anonymous letters
• Identifying misleading and malicious allegations
• How to deal with tips obtained from hotlines etc
• How to decide if you need outside help (forensic accountants etc)

Managing the investigation

• The need for thorough planning
• How to keep the investigation low-profile
• Research - what information can lawfully be obtained
• What information is available and can be used
• Forensic evidence and how to obtain it
• Collating information and maintaining the chain of evidence
• Covert monitoring of employees - new legislation
• Knowing when to suspend or dismiss employees

Confronting suspects

• Setting the scene - choice of venue etc
• Planning the interview - do's and don'ts
• How to keep in control
• The use of open questions
• Interpreting body language
• How to recognise when someone is lying
• Recording and evaluating the conversation
• How to avoid accusatory or threatening questions
• The need to think like a fraudster

The interview (using role play)

Communicating the results

• When and how to inform top management
• When to inform regulators / the police / etc
• Managing external coverage
• Dealing with the media / shareholders
• The use of successful fraud investigation as a moral deterrent
• Rebuilding damaged customer / supplier relationships

This course has been developed by Business Risk Management Ltd and will be led by Phil Griffiths its Managing Director and fraud specialist

Copyright Business Risk Management Ltd 2004

Course Outlines

Course Diary

Booking Information

In-House Training