IN DEVELOPING A FRAUD PROFILING METHODOLOGY as part of a sound antifraud program, you need to develop an awareness of the following key fraud risk indicators:
- Characteristics of employees acting suspiciously and behavioral warning signs.
- Signs or indicators of the modus operandi or fraud methodology.
- The existence of high-risk departments and positions.
- Acknowledging and understanding which industries are highest risk and if the organization is in or trading with that industry.
- Indicators of consequences of fraud risk.
It is incumbent upon senior management to recognize a proactive approach, through a sound antifraud program, as an important part of their responsibility in attending to organizational and system vulnerability and managing fraud risk.
A sound antifraud program includes the following methodologies, all targeting the deviant behavior of the human being:
- Enhanced audit department.
- Forensic accounting capacity.
- Code of ethics or code of conduct to include declarations of conflict of interest and gifts.
- Fraud policy.
- Fraud training program.
- Segregation of duties for key activities.
- Appropriate recruitment procedures, selecting honest candidates.
- Policies for rotation of staff duties and forced vacations.
- Knowledge of key fraud risks and controls, and their regular monitoring.
- Whistleblowing hotline and policy.
- Fraud risk assessment process.
If we are to consider the introduction of profiling to our antifraud ...