Investigation and Forensic Services

During economic turmoil, the risk of fraud, corruption and abuse increases

It’s a fact. When markets constrict – and when growth slows and revenues come under pressure – the risks of corporate fraud and misconduct escalate. Across the workforce, the fear of losing jobs, bonuses and benefits can silently undermine corporate cultures – even those recognised for upholding a high standard of ethics, behaviours and values. For some people, “doing the right thing” is hard to live up to when unpaid bills start piling up on the kitchen table. And when some of the consequences of cutting costs take effect – like weaker enforcement of segregation-of-duties restrictions and fewer resources dedicated to the internal audit and compliance function – risks rise.

Are companies adequately prepared to forestall these events? Or respond immediately when they occur? Or remediate vulnerabilities quickly to minimise the risk of a repeat occurrence?

Compliance – are you as protected as you think you are?

For many corporate risk managers, compliance officers, internal auditors and general counsels, the answer is often a cautious yes. This confidence, however tenuous, should make sense. After all, for the last several years of increased awareness of these issues, many companies have started implementing programmes and controls to prevent and detect fraudulent financial reporting, misappropriation of assets and criminal conduct in compliance with a rich tapestry of requirements.

A proactive approach makes good business sense – especially in difficult economic times

• an effective first line of defense,
• strong internal controls,
• monitoring/auditing procedures that leverage technology to detect key risk indicators on a timely basis.

When economic conditions decline, companies should proactively consider fraud risks – particularly those most common or unique to their industry and theatres of operation – as part of their anti-fraud programmes rather than waiting for government bodies, auditors, customers or the press to find fraud, waste or abuse.

With proper planning, policies and procedures, and controls, companies can reduce the risk of serious fraud, identify fraud occurrences early and minimise the damage thereof. A detailed fraud risk management programme can also help companies effectively respond to a fraud incident with appropriate investigation and remediation. As always, prevention is better than a cure. And the payoff can be significant.

How we can help

• Identify your organisation’s vulnerability to financial and operational irregularities and evaluate potential gaps in youranti-fraud programme.
• Understand how effectively your organisation’s misconduct management programme engages people, processes, and technologies to address misconduct risk compared to your peers, as well as industry benchmarks and standards.
• Remediate gaps with practical, customised solutions that identify, monitor and report on key risk factors and indicators; evaluate the likelihood and significance associated with each potential and actual fraud instance; establish processes to track key qualitative and quantitative measures; and provide the training required to raise awareness about fraud and misconduct across the organisation.
• Monitor specific business units that require additional oversight by establishing periodic checkpoints for operational fraud risk assessment.
• Develop an effective “first line of defense” by training operations and finance personnel on misconduct risk management.

PwC: The benefits of a practical, experienced-based, and multi-disciplinary approach to managing risk

• Avoid revenue leakage.
• Cut spending while avoiding longer term surprises.
• Protect physical and intellectual property.
• Gain a competitive advantage in frontier and emerging markets.
• Mitigate legal and regulatory risk.
• Safeguard brand value and the personal reputation of senior management and the board.

Forensic Services in CEE