Organisations lose an estimated 5% of their revenue to fraud every year, according to the Association of Certified Fraud Examiners (ACFE).
Widespread global disruption caused by the COVID-19 and its aftermath, as well as rising inflation, political tension, and socioeconomic unrest have created an ideal environment for all elements of the fraud triangle (motivation, opportunity, and rationalisation) to thrive. However, internal audit teams can play an important role in protecting their organisations by driving a culture of fraud awareness and prevention.
Fraud Is on the Rise: Step up to the Challenge, a joint report from the Chartered Institute of Internal Auditors (CIIA) and AuditBoard, outlines the increasing threat of fraud and key actions that auditors, executive leadership, and boards can take to fight it, such as:
- Initiating anti-fraud policies, processes, and controls.
- Leading by example (ie, setting the right tone from the top).
- Anonymizing fraud instances and instead focusing on the trends and lessons learned.
- Encouraging people to talk about fraud so they become more comfortable discussing it.
- Emphasising that your goal is not to act as the fraud police but to cultivate a safe environment where departments can raise issues and concerns.