Frauds and embezzlements risks

לצפייה בעמוד זה: עברית

Economic crime continues to be a serious issue affecting organizations worldwide, despite increasing regulatory actions. This is particularly true today, in an environment where the global economic downturn has significantly increased pressure on organizations and individuals to perform, creating more incentives for frauds, and generating more opportunities for fraudsters to commit their crimes.   

Taking action to assist in preventing economic crime can save your organization from huge financial and reputational damage.

What is fraud?
Fraud is a broad concept that refers generally to any intentional act committed to secure an unfair or unlawful gain. Financial fraud typically falls into six broad categories:

  • Financial statement manipulation including overstatement of assets or understatement of liabilities and improper revenue recognition
  • Unauthorized receipts and expenses including revenue, assets expenses fraud schemes
  • Asset misappropriation including embezzlement, payroll fraud and theft
  • Aiding and abetting including fraudulent sales and promissory notes
  • Senior management and employees with significant roles in financial reporting, Including conflicts of interest
  • Disclosure - including external and internal communication misrepresentation

According to PwC Global economic crime survey, worldwide loss due to economic crime is estimated at $5.7 billion. In addition, 30% of the companies that have participated in the survey reported to have been a victim to economic crime, while 42% of fraud schemes are reported to have been committed by mid-level staff. Risk management contributed for the reviling of 14% of reported fraud schemes.

A proactive approach for confronting and mitigating economic crime and fraud risk should consist of prevention, identification, response and remediation measures including:

  • Clear written anti-fraud policy
  • Risk identification and mapping process
  • Framework for early identification of failure events and suspicious activities
  • Data mining and analysis based on possible scenarios
  • Assignment of clear responsibilities to key personnel
  • Investigation process     

PwC Israel's risk management group is highly experienced in providing a verity of solutions essential for upgrading, optimizing and improving risk exposure mitigation processes.
Our team includes experienced consultants from the fields of finance, accounting, economics, forensics and technology.  

Among the solutions offered:

  • Existing controls analysis
  • Fraud risk exposure assessment
  • Advisory services for selecting and implementing monitoring systems and controls
  • Investigative auditing for identifying and analyzing suspicious activities