Innovation update

Does your fraud risk management program actually work, in practice?

Global anti-fraud and compliance enforcement is on the rise, and regulators want proof that fraud risk management programs are effective. Here we look at some of the hard questions organizations need to ask and some examples of how companies have updated their systems to tackle fraud in the post-COVID environment.

As the new year dawned, Susan felt good about what she and her team had accomplished in 2021 with their fraud risk management program. As the head of internal audit and investigations at a mid-sized manufacturing company, she was confident her program aligned to the five principles described in the ACFE/COSO Fraud Risk Management Guide (FRMG). But now, a few months into the new year, Susan is struggling to find a solid, data-driven answer for her chief compliance officer and chief financial officer, who are asking how the program is actually working, in practice.

Supply-chain issues, new hybrid working models (with many employees working remotely) and other changes to the business environment brought on by the COVID-19 pandemic have altered her company’s fraud risk landscape. How can Susan ensure her program is relevant; and, even more important, how can she and her team measurably demonstrate anti-fraud and compliance effectiveness via key performance indicators? Susan and her company are fictional, but these are dilemmas currently on the minds of many anti-fraud and compliance professionals and their organizations.

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