1. HOW FRAUDSTERS FOOL THE AUDITOR
Jenny Reid

2. Presentation Road Map COMMON DENOMINATOR
My area of expertise – People Risk
How do we fool an auditor?
COMMON DENOMINATOR

3. The crime victim's prayer
“I thank Thee
I was never robbed before;
They took my purse but they did not take my life;
They took my all, it was not much;
It was I who was robbed, and not I who robbed.”
Matthew Henry, English commentator on the Bible and Presbyterian minister,

4. What is an audit?
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, internal auditing, and government auditing, but similar concepts also exist in project management, quality management, water management, and energy conservation.
In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment which is communicated through his audit report.
Wikipedia

5. Who is an auditor? Forensic Quality Cost Performance Internal
Statutory

6. What are the
COMMON DENOMINATORS
???

7. Staff
Suppliers
Management
Clients
Authorities
Reactive
PEOPLE

9. Can we fool an auditor?
“Scamming the auditors is as simple as cut & paste”

10. External
Case Study
iFacts

11. Hardworking staff
Need training
Conference with team building activity

12. Supplier
Good service
Nice guy
Helpful
Synergy in service offering

13. Finances Possible business venture Rented a property from us
Used his services again
Discussed joint marketing strategy

14. HELP US ALL TO GROW and $$$
MY AIM
HELP US ALL TO GROW and $$$

15. Finances Introduction to my suppliers Introduction to my clients
Access to our marketing contacts and systems
PROVIDED INFORMATION FREELY

16. Colleague
Supplier
Tenant
PEOPLE

17. Colleague
Supplier
Tenant
THREAT
PEOPLE

18. DID WE HOOK THE WORM?
YES

19. When should we have been aware of the risk?
Gave good service
Nice guy
Paid his rent late
Reasons for delay varied from time to time
Did business with our clients and did not pay on time
His clients always let him down and this caused payment delays
Never introduced us to his contacts
His suppliers were always unreliable

20. Did we verify any
information?

21. NO!!

22. The Result Finances Loss of US$3 000 Loss of reputation
Hours of investigation

23. Finances Investigation Findings 6 fraud charges in New Zealand
6 months imprisonment in New Zealand for fraud
10 cases of fraud related charges in Gauteng
1 assault charge
Various civil charges
Shocking client references

24. Where did I go wrong?

25. IFACTS VENDOR FRAUD SURVEY

26. Was I going to jump….?

28. Internal
People
Management

29. Factors necessary for a successful whistleblowing programme
Reward mechanism
Independent platform
Ongoing awareness programmes
Provide feedback
Executive commitment
Clear reporting structure for receipt of reports
Commitment and buy in from ALL stakeholders

30. Staff
Suppliers
Management
Clients
Authorities
Threat
PEOPLE

31. HOW HAPPY ARE YOUR EMPLOYEES?

32. WHERE DOES INTEGRITY BEGIN & END?

33. ARE YOUR STAFF MOTIVATED?

39. Is there hope?

41. People Risk Management Programme
Wellness
People Management
People Safety &
Security
Third Party
Executive
Security / Loss Control
People Risk Management Programme HR
Procurement

42. A good employee wellness programme will include advice and recommendations on:
o   Good Health
o   Stress management
o   Motivation
o   Counselling services
o   Ethics & Fraud awareness
o   Personal financial advice
o   Security awareness
     

43. The people risk prevention programme should include the following:
·      Employee screening
·      Integrity assessments
·      Truth verification tests
·      Hot line
·      Third party / vendor verification
·      People Risk Database

44. Online People Management tools include:
·      Induction training
·      HR climate & employee satisfaction surveys
·      Appraisals and performance assessments
·      Recruitment strategy
·      Fraud investigations
·      Exit interviews
·      Health and safety assessments & training
·      Security and risk assessments & training
·      Risk policies and procedures

46. How effective is your People Risk Management Programme?