Home Technology The White Paper reveals the risk of fraud at work

The White Paper reveals the risk of fraud at work

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Australian and New Zealand organizations face increased risk of professional fraud due to combined factors of transition to remote work and persistent political and economic instability, according to the new SAP Concur white paper.

The White Paper on Preventing and Detecting Professional Fraud in Remote Workplaces highlights the risk of professional fraud for organizations and provides insight into how businesses can protect themselves from the threat of fraud.

Jonathan Bibi, head of SAP Concur Australia and New Zealand, said employee fraud is difficult to detect.

“Identifying a scammer can be difficult, especially if it’s a colleague who has worked in the organization for many years. However, the financial and personal problems that people have faced since the beginning of the pandemic have forced some employees to act uncharacteristically when it comes to professional fraud.

The consequences of employee fraud for organizations can include regulatory violations, business inefficiencies, damage to reputation, and impact on the work experience of other employees.

Five main areas of employee fraud:

  1. Fraudulent cost claims are when an employee will claim business expenses that they have never incurred. For example, booking business flights and accommodation on your credit card, but then canceling the trip and saving money from the declared costs.
  2. Inappropriate costs. SAP Concur found that 22% of cost claims do not comply with the company’s spending policy, and 50% of them relate to hotel bookings where business travelers bypass corporate booking processes.1
  3. Fake and duplicate invoices when a fraudster sends a company a legitimate type of invoice for expenses that the company has never incurred.
  4. Business email compromise is used by fraudsters to redirect legitimate funds transfers to alternative accounts. Legitimate emails and invoices are intercepted, and bank details are changed to include fraudulent payment information.
  5. Double processing, where many organizations may accidentally pay the same bill twice, especially when using manual paper processes. Fraudsters use these outdated processes by invoicing one service or product and then sending the same invoice to many companies. Any business that pays becomes a permanent goal.

“Fraud can be very difficult to pinpoint, given that the Competition and Consumer Commission of Australia estimates that only 13 per cent of victims of fraud report losses.2 Many others either accept a small degree of fraud in their organization or simply do not know it has happened.

“The most effective way to prevent and detect fraud is to automate financial processes using specially designed tools that are specifically designed to reduce the risk of professional fraud. This helps prevent illegal or duplicate costs before it can happen.

“Combined with educating employees about the risks and consequences of fraud, as well as cybersecurity measures, it provides the most reliable protection against fraud both inside and outside the organization,” Bibi said.

Literature
1 https://www.concur.com.au/resource-centre/whitepapers/preventing-and-detecting-occupational-fraud-australian-and-new-zealand-organisations
2 https://www.accc.gov.au/taxonomy/term/160

Image: © stock.adobe.com/au/leowolfert

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