Most organization does outsourcing their business process to cut the cost, decrease complexity in business process, and receive quality work from experts and professionals. Though there are numerous benefits there are also some risk factors in doing so. There can be fraud susceptible processes while outsourcing a business process to an outside team. Most companies don’t have the huge manpower to check each transaction and verify them to clear the risk of fraud activities.
Most experts have these questions:
What is Fraud Risk Management?
Why my company needs a fraud risk management expert?
Today our expert team is going to explain all of your questions.
What is Fraud Risk Management?
As the term explains fraud means doing illegal activities like theft, corruption, conspiracy, embezzlement, money laundering, bribery, and extortion for personal gains or vested interest.
There are different types of Fraud activities in a company:
Crime against a consumer or business client: Misrepresentation of service or product
Fraud against the employer: False expense claim, fraud in payroll processing.
Fraud against financial institutions: using company asset like cheque, credit card or insurance claim illegally
Crime against the government: Fraud in tax filing etc.
Fraud against professional ethics: Testing illegal drugs in patients
Cyber Crime: Hacking, Phishing, SQL injection, etc.
Fraud risk management is developing policies and practice to minimize the risk of fraud or it is simply anti-fraud measures within
the organizations.
Does my organization need a Fraud Risk Management expert or should I outsource to a Fraud Risk Management Company?
According to the ACFE Report to the Nation
2008 (ACFE report) estimated that organizations lose
7% of their annual revenues due to fraud activities.
Another example is the Association of Chief Police Officers (the
ACPO) in 2007 revealed that fraud results in losses
of £20 billion each year in the UK.
The world bank has estimated a $1.5 trillion loss as part of fraud activities.
Most companies do try to tackle the fraud by payment audits by the team lead, and regular internal audits but these do not still get effective results. Smaller organizations often lack robust internal controls and segregation of duties – and are therefore more susceptible to fraud risk.
So if you think your organization is growing and there are policies to be implemented then definitely you should be checking a fraud risk management expert’s service
