CHAPTER 17Concluding Notes on Fraud Prevention and Detection
IN THE OLIVER TWIST novel, we have the famous line, “Please, sir, I want some more.” There is a great uproar after Oliver repeats the sentence. Top management generally also wants some more profits and tries to get this by, amongst other things, cutting administrative costs related to internal controls and proactive fraud monitoring. These cost-cutting steps create an irresistible opportunity for some employees. Remember that we only need one person to see and to exploit an internal control weakness to generate a multi-million-dollar fraud loss.
Our analytics-based fraud journey took us through some interesting fraud cases, all of which are still having an impact on the fraudsters' lives and are possibly also still having an impact on many of the victims' lives as well. We've taken a long hard look at various analytics tests designed to detect various types of anomalies. We're now at the point where we will review the importance of our anomaly detection tests. Given the pervasive nature of fraud, it seems that organizations cannot look to the legal system to be all that much of a deterrent or to the legal system as a provider of punishment. This chapter looks at the costs of occupational fraud, some aspects of our legal process, a case in which an attorney embezzled funds from his firm's trust account, and some of the fraud prevention and detection solutions available to employers.