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Prevention and detection of frauds

Organization ACFE (The Association of Certified Fraud Examiners) defines fraud as “the benefit of an individual focused on personal enrichment throgh deliberate misuse or use of resources or assets of the employing organization”. Based on simple conditions, fraud can be divided into three categories: basic fraud, corruption and false reports.

Organizations traditionaly see the prevention and detection of frauds through the introduction of internal controls. A typical test is an internal audit, which uncovers 18% of frauds according to ACFE study. Internal controls and external audits are responsible for solving 30% of detected frauds. Many organisations use both methods and their components are becoming increasingly complex, which exponentially growes data capacities. Strong internal controls and audits play and important role in prevention and detection of frauds, but its unrealistic to assume that they are fully effective.

Building of better traps = operational analysis and continuous monitoring

Operational analysis is one of most effective methods to detect fraud in the organization. To maximize the effectiveness of fraud detection systems, operative analysis needs:

  • work with a full set of indicators of potencional fraud
  • conduct analysis and time testing of the transaction as detailed as possible
  • allow easy comparision of data and transactions from different company’s or operating systems

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