Increased regulatory scrutiny. Negative publicity and loss of customers. Damage to your corporate reputation and brand. Legal consequences. A direct and adverse impact on your bottom line. The costs of financial fraud are high and if you fail to take appropriate action these could be some of the associated costs to your business.
 
How prepared are you? What can you do to minimise your organisation’s exposure to fraud and financial crime activity?  In the unfortunate event that you are a victim of such activity, how will you investigate the causes and determine your loss with a minimum disruption to your business?

The passing of The Fraud Act 2006 created separate free-standing offences of fraud for the first time: proof then, that fraud is an increasingly common problem.

Creating barriers to fraud
Since FSMA 2000 the FSA Handbook has required regulated financial institutions to take “reasonable care” when putting in place systems and controls to counter the risks of fraud.  Firms are specifically required to report to the FSA any instances of fraud suffered, regardless of size, where these have an impact on the institution’s systems of internal control. Furthermore, firms must ensure that they have an effective and robust anti-fraud strategy.  Senior management must set the correct tone and ensure that an appropriate anti-fraud culture exists in their firm.  If a firm fails to maintain effective systems and controls to mitigate fraud risk they run the risk of FSA sanctions.

The Basel Committee has also given a high profile to the issue of fraud risk management. Under Basel II  those who can demonstrate they have appropriate and adequate barriers against fraud may be allowed a lower capital requirement.

Are you vulnerable? Is your financial fraud risk management framework up to scratch? 
At Deloitte, our financial fraud experts can provide tailored assistance to assist in all aspects of your fraud risk management requirements.  For example we can help you train your employees in fraud awareness, develop ethics and whistle blowing policies and draft fraud response plans.  We can perform enterprise-wide surveys of staff and management’s views of financial fraud and related issues, and conduct targeted fraud risk reviews to identify potential weaknesses and areas for development. 

Deloitte has extensive experience in successfully investigating a wide range of fraud and financial crimes from employee theft through to corruption. Our global network can provide you with expertise in all countries where you do business.  

The use of forensic technology
Forensic ‘imaging’, a process which captures a snapshot of a computer’s memory even after files have been erased, has been critical to proving allegations in many fraud investigations. We also use our proprietary software, D&Tect, which has a proven track record of identifying fraud, VAT savings, compliance breaches, money laundering and duplicate payments made to suppliers for a number of clients. We expect the use of forensic technology to continue to advance, and our specialists are well versed in capturing and analysing computer-based evidence to Police standards.