International Fraud Awareness Week is observed every year to raise awareness and educate stakeholders on the repercussions of fraud. This year, “Fraud Week” is from 17-23 November 2019, and EY Forensic & Integrity Services along with the Association of Certified Fraud Examiners (ACFE) Mumbai Chapter are supporting the global cause. Held under the aegis of ACFE global, Fraud Week aims to encourage ethics, integrity and adopting a zero-tolerance approach toward misconduct.
In recent times, the seriousness of the global fraud problem has intensified. According to ACFE’s 2018 Report to the Nations on Occupational Fraud and Abuse, fraud can result in organizations incurring almost a 5% loss to their annual revenues.
EY and ACFE Fraud Week 2019 Newsletter covers recent trends, surveys on in-house investigation teams and technology, contributions from industry champions and winners of the anti-fraud contests. These may be helpful in assessing organizations’ fraud awareness initiatives and mitigation efforts.
Some of the key trends observed in India from a fraud perspective are:
ISO37001 anti-bribery standard: The compliance landscape in India is maturing gradually, with many organizations adopting global standards and guidelines to fortify their anti-bribery and anti-corruption frameworks. ISO37001 has gained prominence and some of the key drivers for adoption include organizations’ global presence, competitive advantage and inspiring confidence amongst stakeholders.
Business email compromise: An EY report states that the average cost of a data breach last year was US$ 3.62 million. Business email compromise was one of the most common techniques adopted by cybercriminals as they duped unsuspecting victims. The use of weak passwords, reusing old ones or not changing them regularly seems to be the main route of compromise, leading to financial and reputational distress.
Whistle-blowing: ACFE’s Report to the Nations 2018 highlights that almost 50% of corruption cases globally were detected by tips. Recent reports also stated that the US SEC received 5,212 tips during the 2019 with a majority covering corporate disclosures, fraud and manipulation. As the numbers increase, whistle-blowing or the vigil mechanism serves as an important reminder for organizations to handle concerns and complaints in a prompt manner.
Technology adoption: Anti-fraud professionals are adopting emerging technologies to counter fraudsters that may be using new and sophisticated ways to commit crimes or target victims. According to ACFE’s Anti-Fraud Technology Benchmarking Report 2019, around 55% of organizations are expected to invest and augment their anti-fraud technology over the next two years. 64% said the increased volume of transactions they can review with data analytics has been beneficial to their anti-fraud programs.
Globally, companies need to take significant steps in enhancing their anti-fraud efforts. ACFE’s inhouse benchmarking survey 2019 states that 58% of organizations have inadequate levels of anti-fraud staffing and resources. But on the positive side, 60% of organizations were looking to increase their investment in anti-fraud programs in the next two years.
Download the EY and ACFE Fraud Week 2019 Newsletter here.