Fraud Detection and Fraud Protection Framework


Fraud exists in varying levels in every business enterprise. The level of fraud experienced depends on three factors. The decision to commit fraud is considered choice based on these factors:

OPPORTUNITY – A way to gain a benefit

RISK – The chance of being detected.

REWARD – The benefit

This is known as the “Fraud Triangle”.

Fraud Risk is measured in terms of “consequence and likelihood.” Some risks will be accepted, unacceptable risks will be treated but in order to assess risks, they must be identified.

5wh Fraud Risk Management Services will work with the company management to:

1. Reduce the opportunity of fraud through cultural change and employee awareness.

2. Increase risk of detection through sound fraud prevention strategies.

3. Reduce the level of reward by limiting exposure to high fraud risk activities.

4. Investigate fraud when and proactive measures fail.

Fraud Awareness Lectures or Seminars.

Most business plans do not include fraud protection because the methods fraud offenders use are not something that business people have much knowledge of. Usually fraud detection is a result of a bad experience. Fraud methods range from simple and efficient to high tech.

Conduct a High Level Fraud Risk Assessment

After an inspection of business records and business procedures, the fraud risk of a business can be assessed and risks rated from negligible to catastrophic. Treatment options will be recommended.

Prepare Fraud Risk Management Plan

A Fraud Risk Management Plan includes a Fraud Response Plan, Fraud Control Plan and Fraud Awareness Training. Existing systems and procedures will be tested and rated and recommendations suggested to minimize the risk of fraud and quickly detect non compliance.

Prepare a Code of Conduct

A Code of Conduct is a document that binds all employees to a standard of ethical behaviour. A Code of Conduct is usually made available to the public to demonstrate the integrity of an organisation and its employees.

Fraud Control

Fraud Control incorporates an examination of all processes and practices to determine areas of fraud risk. Benchmarking assesses the organizations risk of fraud and corruption rated against best practice.

Risk Mitigation Strategies

Mitigation strategies for areas of high risk are developed. Lower grade risks might be accepted once they are identified and quantified.

Data Mining

Data Mining is a series of tests and investigations that can detect anomalies in accounts that require further investigation. Data mining is a valuable tool in the detection of fraud.

Provide Specialist Fraud Investigation Services

If internal or external fraud is detected or suspected, a full investigation can be conducted and a full criminal brief of evidence prepared for the prosecuting authorities.

“It’s estimated that 5% of revenue may be lost to occupational fraud where no effective fraud risk management exists”