عرض العناصر حسب علامة : الاحتيال
الخميس, 26 أكتوبر 2023 11:28
رسالة ماجستير: استخدام إشارات خطر المراجعة في تحسين فعالية المراجعة الخارجية في كشف الاحتيال المالي
رسالة ماجستير عن المراجعة الخارجية وهدف الدراسة التعرف على مدى استخدام إشارات خطر المراجعة في تحسين فعالية المراجعة الخارجية في كشف الاحتيال المالي.
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رسائل ماجستير و دكتوراة
السبت, 15 أبريل 2023 09:33
رسالة دكتوراه: أثر تفعيل آليات المراجعة القضائية لعمليات التحول الرقمي على الحد من الفساد والاحتيال المالي بالبيئة المصرية
استهدف البحث تحديد أثر تفعيل آليات المراجعة القضائية لعمليات التحول الرقمي للحد من الفساد والاحتيال المالي بالبيئة المصرية، وذلک من خلال إجراء دراسة ميدانية على عينة من (العاملين بالإدارة العليا – المراجعين الخارجيين – العاملين بإدارة المراجعة الداخلية – الأکاديميين بأقسام المحاسبة والمراجعة بکليات التجارة).
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رسائل ماجستير و دكتوراة
الخميس, 23 ديسمبر 2021 14:34
محاربة الاحتيال في بيئة عمل هجينة
يأتي مع بيئات العمل الهجينة الجديدة لدينا إيجابيات وسلبيات. في مهنة المحاسبة على وجه التحديد، يؤدي تطبيق التكنولوجيا الجديدة إلى عمليات أكثر كفاءة، ولكن يمكن أن يؤدي أيضًا عن غير قصد إلى مخاطر إضافية مثل الاحتيال.
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المحتوى بالإنجليزية
Fighting fraud in a hybrid work environment
By Vinay Pai
December 17, 2021, 9:00 a.m. EST
4 Min Read
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With our new normal of hybrid work environments come both pros and cons. Specifically in the accounting profession, the implementation of new technology creates more efficient processes, but can also inadvertently lead to additional risks such as fraud.
While all industries face privacy and data security challenges in hybrid environments, the sensitive and confidential information in accountants’ routine work demands a higher level of cybersecurity to ensure that all client data is totally secure. It is essential that accountants remain vigilant for possible fraud and actively safeguard network systems to ensure continued strategic growth for small and midsized businesses.
How does fraud happen?
Advances in Tech brings together some of the latest software and technologies that are helping the industry move forward.
ACCOUNTING TODAY
Fraud can occur in many ways. While the concept of physical fraud risks may seem outdated (especially in hybrid environments), the majority of confidential data — such as Social Security numbers and credit card information — is still stolen the “old-fashioned” way, via theft of physical laptops or important documents (e.g., paper checks, invoices, sticky notes) from unsecured areas. Even with the potential of artificial intelligence to reduce the burden and risk of many manual processes, many accountants and bookkeepers are still remarkably reliant on paper with 40% of bookkeepers still printing and mailing checks.
Hybrid and remote work models have also exacerbated many existing cybersecurity risks for many accounting firms. In the early days of the pandemic — when the transition to remote work needed to happen essentially overnight — it wasn’t uncommon for firms to put necessary “Band-Aid” solutions in place. Many companies and accountants moved their data to the cloud for the first time, which is a positive development, but not a silver bullet to safety.
Phishing attempts have continued to rise, preying on the stress of employees and owners, and the lack of updated protections and employee education as they managed through a crisis. These deceiving emails and notes, often disguised as emails from colleagues, are one of the most common ways that hackers can gain access to even the most secure networks. Now is the time to refine and improve those new processes put into place over the past two years, prioritizing more secure practices and the safeguarding of sensitive data.
Preventing fraud
There are a variety of practices that firms can implement to mitigate the risks of fraud in hybrid work environments. From a data security perspective, it starts with the cloud.
Cloud-based solutions and Software-as-a-Service providers are the most secure way to store client data, as these systems have more secure encryption methods than what accounting firms can offer in-house. This also removes the risk of stolen computers from a “smash and grab” robbery. While it’s now generally accepted that storing data in the cloud is far more secure than relying on a paper trail, decentralized personnel and the lack of pre-developed protocols for remote work left many firms exposed to additional cyber risks from unsecure networks and personal devices.
Going forward, accounting firms should ensure that all accountants are trained on an ongoing basis in the best cybersecurity practices while in a hybrid environment, including how to identify, prevent and address all types of fraud threats, from physical to digital. Employees should be vigilant about diversifying their passwords, keeping their login credentials private and updating them regularly.
It’s also critical to use secure devices and networks, implementing multifactor authentication for all services, and software to monitor for phishing and other scams. Lastly, with the rise in popularity of automated workflows to process data and transactions in daily accounting practices, accounting firms should consider investing in and implementing AI systems that scan for mistakes, such as duplicate payments, fraud — and even basic human error.
Strengthening tech security
In light of many major players in the accounting profession embracing more permanent hybrid and remote work models, accounting firms of all sizes should identify what, if any, interactions really require paper or physical interaction. For practices (such as accounts payable and payroll) that can easily be digitized, accounting firms should ensure they’re supporting those practices through secure, online systems and cloud-based storage solutions to ensure the highest levels of data protection.
Additionally, for communication with clients, firms should establish secure portals for the transfer of sensitive documents that contain personal or sensitive information, such as Social Security numbers, bank account information and credit card details. Never send these documents over email. A cloud-based document sharing solution is much more secure. All-in-one SaaS solutions that allow you to manage your workflow, approvals and payments can provide high security and convenience in hybrid environments.
Prior to the pandemic, many accounting processes were based primarily on physical work models and paper-based processes, but the acceleration of flexible and remote work models has only increased the overdue need for accountants to embrace automated technologies and AI-enabled workflows.
As firms seek to implement new workflows, it’s essential to prioritize educating the teams about how to mitigate new and emerging fraud risks and secure data on cloud-based servers before the Trojan horse is wheeled through the front gates.
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الأحد, 21 نوفمبر 2021 15:23
الواقع البديل لإدارة الأرباح الحقيقية
قد تولد إدارة الأرباح الحقيقية مكاسب مالية قصيرة الأجل، ولكنها قد تخفي الاحتيال.
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المحتوى بالإنجليزية
The Alternate Reality of REM
Real earnings management may generate short-term financial gains, but it could be concealing fraud.
Robert J. Knisley and Hui LinNovember 18, 2021Comments
Among the pandemic’s many impacts, occupational fraud risk has increased substantially in many companies and industries worldwide. Nearly three-fourths of respondents to the Association of Certified Fraud Examiners’ (ACFE’s) Fraud in the Wake of COVID-19: Benchmark Report–September 2020 Edition predicted fraudulent behavior to increase in the following 12 months.
As revenue streams and planned spending have been dramatically upended and altered, organizations have eliminated or drastically cut operational spending to account for the lost revenue. That opens the door for financial statement fraud risks. Financial statement fraud represents only 10% of fraud cases in ACFE’s 2020 Report to the Nations global study, yet it accounts for the highest median loss ($954,000). Further, such schemes can go undetected for as long as two years.
Real earnings management (REM) can be construed as a type of financial statement fraud in which managers intentionally create an alternative reality of what is going on within the organization’s accounts. With this fraud, management deviates from normal business practices to meet short-term earnings thresholds. That can delay bad news but eventually could cause a more significant market disappointment. As financial regulators increase scrutiny of companies’ earnings management practices, internal audit can help preemptively by assessing and monitoring operational decisions to ensure financial reliability and effective risk management.
REM PRACTICES RAISE RISKS
REM can raise audit concerns about a company’s accounting practices, and those practices also may have legal risks. Green Mountain Coffee Inc. is among several companies that have faced class-action securities fraud lawsuits stemming from the controversial practice of inflating product demand by building up inventory.
There are five ways that companies perform REM:
Overproduction to decrease cost of goods sold (COGS) expense.
Cutting desirable research and development expenditures.
Cutting general and administrative expenses of sales.
Timing the sale of fixed assets to report gains to boost current period earnings.
Encouraging customers to take excess inventory accompanied with unusual discounts or rights of return, also known as channel stuffing.
Internal auditors should be aware that managers’ intentions distinguish acceptable REM from fraudulent REM activities. For example, a manager may intentionally engage in fraud-ulent REM to achieve a bonus or avoid missing an earnings target. This behavior creates an alternate, fraudulent reality through a deliberate distortion of the financial statements.
THE ILLUSION OF COST-CUTTING
Auditors can better understand about REM practices by taking a closer look at how companies overproduce inventory to decrease COGS expenses. U.S. Generally Accepted Accounting Principles require absorption costing when valuing inventory for external financial reporting. This costing method allows companies to allocate the full manufacturing costs (variable and fixed) to a product.
Absorption costing occurs when a company assigns the direct material, direct labor, and manufacturing overhead to the product in the work-in-process account during production. Once the product is completed, the company transfers the cost of goods manufactured (COGM) from the work-in-process account to the finished goods account, where those costs reside on the balance sheet. When the finished product is sold, the company transfers the COGM off the balance sheet to the income statement as COGS.
Manufacturing overhead represents a significant percentage of overall manufacturing costs. In addition, management has discretion in determining a basis for allocating the overhead to the product, such as based on direct labor, machine hours, or volume. Therefore, internal auditors should be aware of the method management uses to allocate the overhead and whether it may have fraudulent implications. Auditors can learn this by asking the production manager or cost accountant about the allocation method in place and why it is used.
U.S. Financial Accounting Stand-ards Board (FASB) Statement of Fin-ancial Accounting Standards No. 151 provides discretion by allowing companies to account for normal excess capacity under absorption costing. However, FASB does not clearly define what constitutes normal excess capacity. This discretion provides managers an opportunity to increase manufacturing production above normal capacity — what the company is normally able to sell — to achieve analyst earnings per share, annual bonus, or enhanced financial statement performance expectations.
Although the organization’s financial statements are strengthened in the short term, the additional inventory can have an adverse long-term effect by eroding firm value and brand image. Internal auditors should determine whether the company has significantly built up inventory that exceeds planned production or forecasted sales. Such an increase would affect the inventory account on the balance sheet and the COGS account on the income statement, providing a red flag. Further, auditors should investigate the associated expenses related to the excess inventory, such as storage and insurance expenses, which would not have been incurred otherwise.
INTERNAL AUDIT AND FRAUD DETECTION
Internal audit is well-suited to examine management’s business decisions as well as investigate REM and its fraud potential. However, auditors may struggle to detect managerial intentions because of REM’s opaque nature and ability to be disguised as actual operational decisions. That is particularly unfortunate in the manufacturing industry, which suffers among the highest median losses from a case of financial statement fraud ($198,000), according to the ACFE’s Report to the Nations.
Internal auditors can use their broad access to organizational systems and many areas of the business to detect fraudulent REM activities such as overproduction of inventory. Those efforts may be helped by three types of analysis tools:
Horizontal analysis. Considers the financial performance of an account over time.
Vertical analysis. Compares the financial performance of an account to a base amount in a particular year.
Ratio analysis. Measures the relationship between financial statement accounts.
Internal auditors should use these three analysis tools together to identify areas of fraud risk and potential red flags in the financial statements. They can use horizontal analysis to compare the current balance of the inventory account to previous quarters and years. For example, if the inventory account is growing significantly over time without irregular sales volume, it could indicate there is inventory buildup for fraudulent reasons.
Vertical analysis, or common size analysis, is most useful when comparing industry benchmarks or competitors’ financial statement accounts. Common-sizing involves dividing each account into a base number — that is, the total assets for the balance sheet and revenues for the income statement — thereby showing each account as a percentage of the base number. By common-sizing the financial statements, it becomes easy to measure the relative importance of each account and provides an opportunity to compare companies of different sizes. For example, is the organization’s COGS account significantly less than industry benchmarks or competitors?
Finally, ratio analysis is helpful in measuring the relationship between the balance sheet and income statement accounts. Two ratios that would be of interest are inventory turnover and day’s sales in inventory. The inventory turnover ratio — the COGS divided by the average inventory — indicates the number of times an organization goes through its inventory in a year. If this ratio has decreased significantly over time, it could indicate an excessive buildup of inventory.
The day’s sale of inventory provides information on how much inventory an organization has available. It is calculated by dividing the ending inventory by the COGS and then multiplying by 365. A dramatic increase in this ratio could indicate an inventory issue.
Besides these analysis tools, internal auditors should monitor the organization’s budget-to-actual report monthly to identify any significant changes in inventory-related accounts. Furthermore, where analysis shows accounts with red flags, auditors should investigate further by performing more substantive tests of analytical procedures and the details of transactions and balances, as well as questioning operational personnel. Additionally, internal auditors should review the controls over manufacturing production and examine the master budget and its components. If internal auditors are familiar with REM and can detect when it is practiced, they can investigate whether the intention is to mask declining sales and report what they discover to management and those charged with governance.
THE SIGNS OF FRAUD
Buildup of inventory could be attributed to slumping sales or intense competition from competitors, rather than fraud. Being able to distinguish between fraudulent and legitimate practices is one reason why internal auditors should possess a solid understanding of their organization and the industry in which it competes.
Likewise, auditors should know what pressures and incentives influence managers’ behaviors and, ultimately, their decision-making. Analyst expectations and managerial compensation incentives can motivate managers to commit financial statement fraud through an REM fraud scheme. In turn, the manager’s REM decisions to increase manufacturing production intentionally deceive analysts, shareholders, and creditors. Such temptation is even more reason for internal auditors to take extra steps to help safeguard their organizations against fraudulent schemes in these volatile and uncertain economic times. - البلد الأردن
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موضوعات متنوعة
الأربعاء, 08 يونيو 2022 13:08
مقالات : المحاسبة الإبداعية والاحتيال المحاسبي
كاتب المقالة : د. عامر بن محمد الحسيني
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محاسبة و مراجعة
الإثنين, 28 مارس 2022 13:07
5 خطوات لمنع الاحتيال
بينما لا أحد يريد تصديق حدوث الاحتيال في مؤسسته، لسوء الحظ، يمكن أن يحدث هذا بالفعل. عادةً ما يكون الاحتيال جريمة، مما يعني أن وضع تدابير وقائية للاحتيال يمكن أن يساعدك في تقليل الاحتيال قبل أن يبدأ.
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المحتوى بالإنجليزية
5 steps to prevent fraud
By Brandy Keller
October 26, 2021 3:00 PM
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While no one wants to believe fraud is occurring at their organization or nonprofit, unfortunately, it can and does happen. Typically, fraud is a crime of opportunity, which means that putting preventative fraud measures in place can help you reduce fraud before it starts.
Here are five steps you can put in place no matter what size your organization is to decrease your risk of fraud. Remember, when you have formal reporting mechanisms in place for fraud, you are setting the foundation of fraud reduction.
Whistleblower policy
fraud-detect.jpg
Sean Gladwell/Getty Images/Hemera
Create a clear fraud whistleblower policy for your organization and its employees. Make sure this fraud policy is part of employee onboarding, and part of your employee handbook. Conduct background checks during the hiring process. Post the fraud policy in your office as well as on your internal website. Establish different ways any employee can report fraud, including a tip hotline, anonymous email and an internal fraud website reporting link.
Note: Make sure your whistleblower policy includes a no-retaliation clause, a reporting procedure and confidentiality protection for the whistleblower. For a sample whistleblower policy for nonprofits, see these resources from the Council of Nonprofits.
Tips
Encourage employees to submit a tip or concern of fraud at any time and make sure they can do so via email, phone or in an anonymous tip box onsite. Help employees understand that they are part of the fraud protection team.
Note: The latest Report to the Nations from the Association of Certified Fraud Examiners found 43% of occupational fraud was reported through tips.
Internal controls
Ensure that you have internal controls to protect the security of your data, assets and any proprietary information in place, and that you update them on a regular schedule.
One of the most important controls you can implement is the segregation of transactions. Fraud is more difficult to pull off if you need to get multiple people involved. Typically, fraud is only perpetrated by one person alone, so if you have more people involved, the more you can deter fraud.
Don’t have a single employee handling the entire cash processing cycle. By assigning more than one staff member or employee to handle the processing and accounting for cash from beginning to end, organizations can lessen the opportunity for fraud. These multiple staff processing systems provide a benefit not only in fraud reduction but also in the security of the cash received and proper reconciliation for the donations.
Organizations should also avoid a single employee having sole responsibility over reconciling cash or asset activities. Putting checks and balances in place for any transactions processed will reduce the opportunity for fraud. Using a fund accounting software solution can help you to have internal controls in place that will flag entries or variances of a budget that would be otherwise undetected.
Keep in mind as well that fraud can be as simple as one employee printing out duplicate checks, or forging signatures on checks, so you want to keep all company checks locked up. Many companies also employ a two-signature check system so any check larger than $500 must be signed by two different people on the financial team.
Make sure you have your organization’s financial tasks segregated when it comes to processing cash and checks or reconciling cash, checks and payments. It is much easier to cover up fraudulent activities if the person committing the fraud is the only person with access to the full accounting system.
Fraud can be committed at any level of the organization so it’s important that all internal controls for fraud apply to every role at your organization.
Note: Internal accounting controls might include user role restrictions, protected access to proprietary asset information or funds, and alerts for budget variances.
Audits
Make sure you’re not waiting for a yearly audit to detect any fraud that might be occurring. While fraud is sometimes detected through an audit, don’t depend on or wait for a yearly audit to find fraud.
Note: Financial statement fraud is one kind of fraud that can occur. This includes net worth overstatements or understatements, misstating or overstating assets, false revenues or understated revenues, as well as improper disclosures. These are items an auditor will be looking for throughout an audit.
Internal fraud assessments
Build internal fraud assessments into your yearly organizational calendar, and make sure your managers and employees know your company conducts fraud assessments regularly.
Just as you do yearly reporting to your stakeholders, think about conducting yearly fraud awareness training. Research shows that more tips on fraud come through organizations that have standard fraud awareness training in place, in addition to a fraud policy.
If fraud is committed at your organization, once it’s resolved, use the opportunity to discuss how the fraud occurred, what was lost and how it happened as part of your fraud awareness training. When you have fraud awareness training, the more you can use real-world specific fraud events that correlate with your type of organization or nonprofit, the easier it will be for everyone to understand how to detect fraud.
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موسومة تحت
الإثنين, 27 سبتمبر 2021 13:45
الدور الأساسي للمدراء الماليين في تعزيز الصحة العقلية للموظفين
بالنسبة للمحاسبين المهنيين، تزيد مشكلات الصحة العقلية من مخاطر عدم تحديد الأخطاء في التقارير المالية أو اكتشاف مؤشرات الاحتيال.
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المحتوى بالإنجليزية
The following is a contributed piece from Russell Guthrie, CFO of the International Federation of Accountants (IFAC). Opinions expressed are author's own.
The coronavirus pandemic has put a long-overdue spotlight on mental health. Clinical studies have found a strong correlation between pandemic-related anxiety and behaviors, such as hopelessness or substance abuse, that companies cannot afford to ignore. Implementing an organizational framework to support mental health is not only the right thing to do, it's smart for business. With the potential to alleviate human and financial costs, support for mental health should be seen as core to the finance function’s role in promoting sustainable value creation.
In 2019, the World Health Organization estimated that mental health issues cost the global economy upward of $1 trillion per year. In the wake of the past year, that cost is likely to increase considerably, reinforcing the need for mental health to be a key priority for employers and organizations worldwide.
Addressing mental health successfully, however, will require the involvement of the entire C-suite — not just HR, and not just the CEO. The finance function must be a pivotal part of the conversation both in supporting the adoption of company initiatives and in examining the cultural values of the accountancy and finance profession globally.
Long-term growth and value creation
Creating a culture of understanding must be a critical priority for CFOs. Failing to care for employees can mean falling behind as an organization, particularly in sectors where a company’s best asset is its human capital. A 2020 Gallup survey found that two-thirds of full-time workers polled were facing burnout at least some of the time, and those people were three times more likely to look for another job. It’s both more humane and more cost-effective to support your talent’s well-being rather than risk a mass exodus and face the high price of attrition — especially if you have developed a reputation for burning out your employees.
Russell Guthrie
Courtesy of IFAC
Effectively addressing mental health by establishing the appropriate infrastructure to support employees can also play a determinant role in attracting and acquiring new talent. According to a recent report by the International Federation of Accountants (IFAC) and the Association of Chartered Certified Accountants (ACCA), Generation Z — the group of 18-25-year-olds entering the workforce during the pandemic — cites mental wellbeing as a top priority when seeking employment.
CFOs must be advocates for the crucial relationship between employee mental health and a company’s bottom line. Fatigue, burnout and other signals of strained mental health stand in opposition to the creativity, collaboration and stamina required to stoke growth and resiliency within companies.
A unique threat
The finance function — and, more specifically, accountancy profession — is innately people-centered, relying on equal parts technical and non-technical capabilities. Professional accountants, in particular, are responsible for critically reviewing information and large sets of data to ensure accuracy and compliance with laws and regulations, as well as evaluating conflicts of interest — a job that demands mental acuity, attention to detail and good judgement. Unsurprisingly, when people are under mental strain, it is increasingly difficult to focus on the task at hand.
For a professional accountant this may heighten the risk of not identifying errors in financial reports or impact one’s ability to spot indicators of fraud, both of which can have far-reaching consequences. It’s not enough, however, to recognize what is at stake. Leaders have to promote a culture that will mitigate those risks.
By nature, the accountancy profession is built on the expectation of perfection. Working against a standard of excellence — with little room for error — professional accountants face numerous internal and external pressures. And particularly now, as the global economy recovers from the impacts of COVID-19, professional accountants are facing increasing stress as the institutions they support focus on rebuilding.
Such high expectations create an environment ripe for the deterioration of mental health. This, coupled with the general stigma surrounding mental health, often results in hesitation to recognize or address fatigue, depression, or any other mental health issues.
Mental health must be included among the tenets of ethical and good business performance. A robust financial system is the bedrock of any thriving economy, and the people who uphold the rigor of high-quality accounting have to be a top priority.
Building the infrastructure
Mental health must be considered part of an organization’s environmental, sustainability and governance (ESG) strategy and approached as would the provision of any other basic human right. Just as global standards are a critical vehicle for reaching sustainability goals, a similarly rigorous approach will help companies, both large and small, establish the necessary infrastructure to properly support employee well-being.
The right response will likely look different from region to region and from organization to organization, but the essential first step is simply making mental health part of the ongoing dialogue of the organization. From there, organizations must deploy initiatives for supporting employees and their ability to perform.
This will likely mean rethinking normalized processes to identify existing threats to well-being and potential barriers to care. For instance, some companies will need to reconsider the relentless focus managers place on productivity. Others will have to reevaluate insurance plans to consider coverage of mental health treatments. They should look to institute mental health literacy programs and leverage outside expert resources to empower employees to prioritize mental health and support those in their communities looking to do the same. Ultimately, leadership needs to be highly engaged in this effort. Successfully shifting corporate culture to prioritize mental well-being starts at the top.
While it’s not solely up to CFOs and the finance function to champion new and expanded norms for operating within the current reality, they are essential to creating a positive space to discuss and address employees’ mental health. It’s mission critical if we want to ensure businesses continue to operate as productively, sustainably, and ethically as possible.
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موضوعات متنوعة
الأربعاء, 22 سبتمبر 2021 21:17
العديد من جوانب الاحتيال في المشتريات
المشتريات هي واحدة من أهم وظائف الأعمال، والتأثير على الإستراتيجية والأداء التشغيلي وإدارة المخاطر. المدققون الداخليون هم لاعبون أساسيون في هذه العملية، حيث يوفرون ضمانًا بأن ممارسات الشراء تعزز الوصول والمنافسة والإنصاف.
معلومات إضافية
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المحتوى بالإنجليزية
Procurement is one of the most important functions of business, impacting strategy, operational performance, and risk management. Internal auditors are key players in the process, providing assurance that procurement practices foster access, competition, and fairness.
Internal auditors also have a responsibility to promptly identify and report deceptive activity, and provide recommendations that strengthen internal controls. Internal auditors must be alert to red flags for dishonest conduct in procurement activities that can lead to significant financial losses for the organization. Red flags can alert internal auditors to four common methods of procurement fraud and give them the foresight to make recommendations that prevent it in the future.
Contractor Collusion
To avoid competing with one another, or to inflate the price of goods and services, contractors in the same market will work together to circumvent a transparent and ethical bidding process. As a result, the procurement entity loses its right to fair, ethical, and competitive prices. Internal auditors should be aware of several types of collusion among contractors.
Complementary Bidding In an effort to influence the contract price and who it is awarded to, contractors intentionally submit false token bids in the procurement process that appear to be genuine. Token bids typically are too high to be accepted, appear to be competitive but do not meet other bidding requirements, or contain special terms and conditions known to be unacceptable to a potential buyer.
Bid Rotation Instead of bidding competitively, two or more contractors tacitly agree to submit tailored bids and conspire to alternate the business among themselves. Each contractor wins a portion of the total business.
For example, Suppliers A, B, and C are bidding on three separate contracts. They agree that A's bid will be the lowest on the first contract, B's will be the lowest on the second, and C's on the third. So, no one gets all three contracts, but each gets a share. Meanwhile, they may also plan their bids to raise the contract price artificially. Often, losing bidders are appointed as subcontractors by the winning contractor to tide over their cash flow while they wait for their winning bid.
Bid Suppression Bids are suppressed when two or more contractors enter into an unlawful agreement, and one or more conspirators abstain from bidding on proposals. They also may withdraw a previously submitted bid with the goal of getting the desired bid accepted.
Market Division Colluding contractors may divide the market according to various criteria, such as geographic area or different segments. Firms that meet the same criteria will not bid against each other, may submit complementary bids, or may rotate bids. Market division also can happen via shell companies used to submit fictitious bids. This allows the real companies to inflate prices because the fraudulent bids are designed to validate the higher price quoted by the real bidder.
When trying to determine this type of collusion, internal auditors may notice peculiar behavior from contractors, such as unqualified contractors consistently bidding high on each project while qualified contractors don't submit bids at all. The winning bidder uses the losing bidder as a subcontractor and losing bids are poorly prepared and designed to fail. In addition, prices fall when a new contractor enters the competition and there may be a pattern of conduct whereby the last party to submit a bid wins the contract.
Collusion Between Contractors and Buyer's Employees
A contractor or supplier may attempt to get an advantage in the bidding process by influencing the procuring company's staff with bribes, gifts, and hospitality. This results in a higher cost to the buyer through various inside schemes.
Need Recognition A procuring company employee who is in on the scheme may overestimate — quantitatively or qualitatively — the actual need of the product/service and convince his or her supervisor of the excessive need to get the procurement authorized.
Internal audit should be alert to some common red flags to identify likely collusion. For example, the needs assessment may be inadequately developed or inaccurately documented. It also is likely that no alternative supplier has been identified, resulting in continuous procurement from a single source. Specifications may be drawn up in a way that only particular suppliers or contractors can deliver, and purchases may be made without receiving reports. Auditors also may come across excessive inventory levels or large write-offs to justify excessive purchases.
Bid Tailoring In this situation, the corrupt employee manipulates specifications to suit a preferred contractor or supplier and eliminate competitors. Specifications may be too narrow to accommodate the preferred supplier, too broad so that an otherwise unqualified contractor is qualified, or vague so that bid specifications are omitted to allow the preferred contractor to raise the price through contract amendments.
Some red flags include weak control over the bidding process, one or few bid responses to invitations, a contract not being rebid despite fewer than the minimum bidders, or a high number of competitive awards going to one supplier. It also is likely that the request for bid submissions does not provide clear submission information, or the specifications for the type of goods/services being procured are too narrow or broad. Bid tailoring often is accompanied by a large number of change orders or variations after the order is placed.
Manipulating Bids Corrupt employees may tamper with bids to favor particular contractors or suppliers by using obscure publications to publish bid solicitations, opening bids prematurely, extending bid opening dates without justification, discarding or losing a bid, accepting delayed bids, falsifying bid registers, or altering bids received. Often, they limit the time for submitting bids so that only those with advance notice have time to prepare and submit. Unethical employees may even void bids for unsubstantiated, frivolous errors in specification or for other false, arbitrary, or personal reasons.
Bid Splitting In this case, employees break a large project into several small projects that fall below the mandatory bidding threshold and award some or all of the component jobs to a contractor or supplier with whom they are conspiring. Internal auditors should be alert for multiple, similar, or identical procurement from the same party, unjustified split procurements in amounts that are just under the upper-level review or competitive bidding threshold, or sequential procurements just under the upper-level review or competitive bidding threshold. This may be followed by change order abuse.
Unjustified Sole-source Procurements Dishonest employees may use noncompetitive procurement to exclude competition and steer contracts toward particular vendors. Justification for sole-source contracting occurs when the product is available from only the single source, when exigent circumstances preclude competitive solicitation, or when solicitation is deemed inadequate after a reasonable search.
Telltale signs of this collusion include frequent use of sole-source procurement contracts — often to the same supplier — or requests for sole-source procurements when there is an available pool of contractors to compete for the project. Often, the procuring staff does not keep accurate minutes of pre-bid meetings or does not obtain the required review for sole source justification. Again, false statements may be made to justify noncompetitive procurements or justifications may be approved by employees without authority.
Negotiated Contract Pricing Schemes
Negotiated contracts are more common in circumstances where conditions are not conducive to competitive, sealed bidding. It is a contracting method that permits negotiations between the procurement entity and potential contractors. In negotiated contracting, potential contractors submit cost or pricing data, such as vendor quotes or already-attained discounts. Unethical contractors will intentionally use inaccurate cost or pricing data to inflate costs in negotiated contracts.
Internal auditors should look for inaccurate or incomplete documentation provided by the contractor to support cost proposals. Sometimes, the contractor may delay providing supporting documentation for cost or pricing data, which may be inconsistent with actual prices or out-of-date pricing. It also is possible that the contractor does not include its negotiated discounts or rebates, or includes an unrealistic profit margin in pricing. Sometimes, contractors use different vendors and subcontractors during contract performance than the ones named in the original proposal. It is also possible that materials and components used are different than the ones included in the original proposal.
Post-contract Schemes
Fraud in the post-contract phase mainly focuses on contract management and payments made on contracts. Most organizations use an electronic accounts payable system with key controls around separation of duties between requisition, ordering, checking receipts of goods/services, and authorizing payments. Schemes are designed, often in collusion with in-house staff, to bypass these controls.
Nonconforming Goods or Services Here, the supplier intentionally delivers goods or services that do not conform to agreed specifications, substituting cheaper or inferior products. One red flag for internal auditors is a high percentage of returns or defects for noncompliance with specifications. Another red flag could be missing, altered, or modified product compliance certificates or compliance certificates signed by employees with no quality assurance responsibilities. Contractors and suppliers should not be allowed to select the sample of goods to be tested for quality assurance, prepare it for testing, or perform their own testing using their personnel and facilities.
Change Order Abuse Change orders and variations are written agreements between the procuring entity and the contractor to make changes to the finalized contract. This is a scheme whereby colluding parties — the contractor and the procuring staff — submit and accept a lower bid to win/award a contract and later bump up the cost via change orders or variations. These typically receive less scrutiny than the usual procurement contracts, which makes them vulnerable to dishonest contractors and employees looking to misuse and abuse established procurement processes for their own gain.
Change order misuse often is characterized by poor internal controls, making it difficult for management to ensure that all change orders are really necessary for work that was unknown at the time the contract was awarded. Usually, procurement employees act out of scope and numerous change orders are justified on a variety of grounds, including the need to substitute more expensive alternatives, unavailability of material or equipment, change in price, and inflation. There is, usually, a repeated pattern of change orders that increases the price, scope, or agreement period. Internal auditors may also find questionable change orders favoring particular contractors.
Cost Mischarging Here, the contractor charges the procuring entity for costs that are unreasonable or unallowable. They also may charge costs that cannot be allocated directly or indirectly to the contract, or may mischarge for accounting, labor, or materials. Internal auditors should be alert to inadequate or absent audit trails supporting the costs charged. Sometimes cost estimates are inconsistent with prices charged or the contractor may even use outdated standards.
Mitigating Fraud
Internal auditors should be alert to distorted rationalizations used by staff and managers to justify noncompliance with established policies, procedures, and practices. Ultimately, it is management's responsibility to take appropriate steps to prevent fraud and minimize procurement risks. This is done through data analytics implementation, strengthening the first two lines in the internal control structure, and staff awareness and training to identify vulnerabilities in the procurement process. The overarching requirement is to improve organizational culture, whereby ethical breaches are identified and reported by employees early and rectified promptly.
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الأحد, 29 أغسطس 2021 16:07
دورة: التدقيق المحاسبي وضبط المخالفات والاحتيال وإدارة التحقيقات المالية
معلومات إضافية
- البلد عالمي
- نوع الفعالية برسوم
- بداية الفعالية الإثنين, 30 أغسطس 2021
- نهاية الفعالية الجمعة, 03 سبتمبر 2021
- التخصص محاسبة ومراجعة
- مكان الفعالية باريس (فرنسا)
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الخميس, 29 يوليو 2021 14:37
ارنست اند يونج EY تقوم بإنشاء حل blockchain للتحدي الضريبي العالمي
قامت EY، جنبًا إلى جنب مع ممثلي الحكومة والصناعة، بإنشاء حل بعيد المدى blockchain لمواجهة التحديات في عملية ضريبة الاستقطاع عبر الحدود.
معلومات إضافية
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المحتوى بالإنجليزية
EY, together with government and industry representatives, have created a far-reaching blockchain solution to address challenges in the cross-border withholding tax process.
Currently, there are some inefficiencies and complexities with the international withholding tax process in relation to dividend distributions. The goal for TaxGrid is to address these and improve tax compliance to nearly real-time, benefiting investors, financial institutions and tax authorities alike.
“Blockchain technology as a remedy to the withholding tax challenge is no longer just a concept,” said Hank Prybylski, EY global vice chair of transformation, in a statement. “This project shows that in the near future, industry and governments may be able to reconcile legal and technical issues, flex to address disparate demands of taxpayers and tax authorities, and promote digital transformation.”
TaxGrid is also designed to help financial intermediaries coordinate the timely exchange of investor information across a network to meet contractual obligations and, potentially, regulatory requirements, while protecting confidential investor information.
The solution uses blockchain technology to automate, decentralize and share tax and financial information more securely between financial intermediaries and tax authorities by creating a kind of shared record book of all dividend transactions, to help with taxation of dividend income at the source. TaxGrid is built to simplify the process for obtaining the correct tax treatment while reducing governments’ exposure to fraud.
To safeguard data privacy and confidentiality, the TaxGrid uses privacy technology to help protect investors’ sensitive information and commercial confidentiality. Zero-knowledge proof is a key feature of blockchain technology, allowing one party to prove it knows a certain piece of information or value, without revealing the actual information.
TaxGrid was developed in collaboration with government tax authorities, including the United Kingdom's HM Revenue & Customs, the Netherlands Tax Authorities and Norway, along with companies including BNP Paribas Securities Services, Citibank, JP Morgan Securities Services, Northern Trust, APG Asset Management, PGGM Investments, and EY teams ,as well as two invited academic institutions: the Vienna University of Economics and Business, and the Tax Administration Research Center at the University of Exeter in the U.K.
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