Consider a new approach to fraud mitigation

The cost-of-living crisis and current economic conditions are presenting unique circumstances for businesses to navigate. Australians have just experienced their tenth straight interest rate rise since May 2022 with the potential for more, the highest inflation for 30 years, and an ongoing rental crisis. These factors have increased the pressure on many people, providing motivation or rationalisation to engage in fraudulent acts that may not have previously existed. In addition, staffing shortages and a push to streamline processes can simultaneously weaken the controls businesses have in place to manage their risk.

Given present circumstances, market conditions and finite resources of audit and fraud risk management teams, it may be wise for organisations to consider how to best manage their fraud risk. Proactive fraud management programs lead the way in helping organisations manage their fraud risk, rather than reactively responding to allegations and investigations, and the associated reputational risk and media attention these can involve. It is better to be ahead of the curve and identify and manage issues than respond to them as they develop.

A successful approach adopted by PKF has been to leverage the in-depth knowledge held by an organisation’s staff of its processes, procedures, risks and work arounds. After all, who knows those systems better than the people using them every day? It is effective and efficient to speak with the people within the business to understand from their perspective where risks lie.

PKF works with organisations’ audit and fraud risk management teams to conduct Fraud Risk Workshops with different parts of the business to identify and leverage the knowledge held within those areas. The workshops are structured to provide an educational component on fraud risk, followed by an anonymous survey designed to identify areas of increased risk to the organisation.