Fraud Prevention, Detection and Auditing

Fraud is expensive! The Association of Certified Fraud Examiners (ACFE)estimates that fraud costs companies about 5% of its annual revenue (source: ACFE's 2010 Report to the Nation on Occupational Fraud and Abuse).Applied to the estimated 2010 Gross World Product, this figure translates to a potential total fraud loss of more than $3.1 trillion. As a result, fraud prevention and detection should be on all organizational radar screens. It is a ripe area to improve net operating income by limiting expenses due to theft, corruption and fraudulent financial statements.

Another powerful motivator for strong anti-fraud controls is that companies with effective compliance programs to combat fraud are given a break under Chapter 8 of U.S. Sentencing Guidelines in the event a fraud case makes its way to a federal court. It provides a line of defense showing that internal wrongdoers are the exception at the company. Candela Solutions can help establish or asses the design of preventive and detective fraud controls. In addition, we can test the operating effectiveness of these controls through internal auditing efforts. Resulting recommendations typically offer specific fraud prevention and detection techniques to tackle high risk fraudulent activities relevant to the operating characteristics and industry of the organization.

While fraud prevention can never be an absolute guarantee, Candela Solutions offers a wide range of services to help companies promote ethical behavior and mitigate the risks of fraud. These include:

• Assessing control environments, including the entity-level areas of:
  • Board of directors & audit committee
  • Integrity and ethical values
  • Commitment to competence
  • Management's philosophy or operating style
  • Organizational structure
  • Assignment of authority & responsibility
  • HR policies & practices
• Development of anti-fraud controls and corporate compliance programs
• Establishing and updating codes of conduct
• Enhancing controls to address the fraud triangle of opportunity, motive and rationalization
• Assessing the operating effectiveness of preventive and detective fraud controls
• Ethics and anti-fraud training for board members, management teams and staff

Refer to related in-house training sessions:

• Corporate Compliance and Ethics Programs: A Detailed Look at Federal Guidelines
• Fraud Prevention, Detection and Auditing
• Occupational Fraud: Understand Schemes, Red Flags, and how to Prevent & Detect Fraud