Measuring Fraud Losses and Tailoring the Strategy


If you don't understand the nature and scale of the problem how can you apply the right solution?

If one went to the doctor with a stomach complaint and the doctor did very little to diagnose the condition and prescribe some treatments, most of us would be disturbed. One would expect a series of tests to accurately diagnose the problem, so the most appropriate treatment could then be applied. One would also expect a follow-up check-up and tests to ensure that the condition was dealt with and the treatment complete. Yet when the problem of fraud is considered in organisations, some don't know they have a problem and others do, but don't know the full extent. Most apply general solutions to counter fraud which are considered to work. It is the equivalent of taking the most popular medicine for a stomach complaint which hasn't been diagnosed. One might be lucky and it works, but there is a risk that it won't, or even worse, that the problem is in fact far more serious. Therefore the authors advocate accurate measurement of fraud as the foundation of any sound counter-fraud strategy. This has benefits not only in identifying the scale of the problem, but also in identifying where the problems lie and in what proportions and, most significantly, it turns the problem into a cost. Once it becomes a cost to an organisation there is much more commitment to reduce it. This chapter therefore explains how it has become possible ...

Get Countering Fraud for Competitive Advantage: The Professional Approach to Reducing the Last Great Hidden Cost now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.