Fraud, business leaders and heads of business units still think this happens to others.The TPE to multinationals, all companies are concerned and are potential victims of fraud.

The term “fraud” does not exist in the law

One could try to define fraud as “intentional act of a financial nature intended to pursue his personal interests (alone or band), by evading legislative or regulatory principles,which leads to a gain unauthorized for the author ( s) “. But, curiously, the term “fraud” does not exist as such in world law, while in the United States such fraud is clearly defined. In abroad there is talk of embezzlement, fraud, forgery and forgery, theft. In practice,the characterization of the facts are complicated, it is common for judges retain all counts.fraud

The stakes for companies

Fraud always results in a loss to shareholders and executives.The two factors that generally affect the most the company are Loss of image.It is common for some companies, having discovered a fraud and have evidence, not to complain to “stifle” the case.The question of survival.If the amount of fraud is high compared to sales of the company, it may risk the bankruptcy filing.Knowledge of fraud can also result a deference of the company in some markets, leading to a fatal loss of revenue.

Social issues

There is a sharp increase in corporate fraud.In addition to organized crime has appropriated some methods of fraud.Consequently, some fraud affecting the entire economy.It is not uncommon for overlap corruption, tax evasion and money laundering.Meanwhile governments have organized to fight against this scourge.The OECD method continues with the introduction in the signatory countries of the organization and procedures to fight against money laundering and terrorist financing,is organizing a Global Forum on transparency and exchange of information for tax purposes;Tracfin, under the Ministry of Economy, has very important ways, including banking secrecy did not object; sales professionals are under an obligation to declare suspicions.

Responsibility of different stakeholders

The delegation of some of its powers by the officer is made under its responsibility, so it is he who is responsible for what is happening in his business, since it has a social mandate.The chief financial officer, meanwhile, has a delicate position in that his subordinate in the company does not cover for the fraud he would have to commit in order. The auditor is independent and has the power of revelation.Finally, the accountant has an obligation to report suspicious and indirect power by resigning.

Some key figures

According to the ACFE – Association of Certified Fraud Examiners – 1800 on any actual, 86.3% relate to misappropriation of assets, 32.8% of the corruption, and 4.8% of investment fraud (fraud under certain simultaneously in two categories).The amounts involved are reversed: the financial fraud that is widely the most significant in terms of absolute value.The average loss is equivalent to 5% of revenues for an entity. The victims are in the order, private companies (42.1%), public enterprises (32.1%), government (16.3%) and non-profit sector (9.6%). the amounts diverted are inversely proportional to the hierarchical position. The average loss for a company amounts to 834 000 dollars when a leader is at fault, and is limited to 70 000 dollars in the case of an employee. Finally, it is interesting that in more than 82% of cases, a fraudster has never had trouble with the law before, and that his professional background is impeccable: fraudsters are good people.

Inventive techniques of fraud

It is impossible to make an inventory of all types of fraud identified.However, some examples include: release of funds by bank transfer, check, active interposed by double regulation,disguised by false invoices, false bank statements, false orders, deductible VAT …; false balance sheet overstatement of contributions … In terms of accounting, creativity can be limitless.

How to prevent fraud?

Some common sense rules can be applied to all sizes of structures.First of all, do not leave the door open.it is clear that an employee who finds that no preventive measure, no checks are in place can easily be tempted.Rules of procedure must talk explicitly announce that any deviation will be punished.an employee who arrives before everyone else and the last hand, which does not take his leave, may be suspect.For major companies, their internal control systems include the detection of fraud.And are more likely to set up a hotline system.For major companies, their internal control systems include the detection of fraud. And are more likely to set up a hotline system. He must be aware of an employee who suspects or discovers a fraud is often helpless.