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Systemic Fraud and Error

Abstract

The procurement function is the key to success in most manufacturing businesses. It is the business process involved from recognising that something needs to be acquired, through to ordering and paying for it. At the same time, it is the highest risk process, and the area in which most frauds and corrupt payments occur, Despite the potential risks, businesses are increasingly reliant on automated controls and expert systems to spot and prevent frauds and unauthorised transactions. But it is very dangerous to think that these systems are infallible. We are seeing a worrying over-reliance on software: this leads to de-skilling of the finance and audit teams, who become less capable of spotting anomalies. Unfortunately, as businesses look to source goods from lower cost (and higher risk) countries, this reliance multiplies the risks, rather than reducing them. Instead, companies need expert input from seasoned fraud and corruption professionals both in designing controls, and in their review and audit. Periodic data analytical review – by expert humans leveraging software, rather than relying on it - is an effective way to mitigate these risks.

Author

Jan Howells
In-House Counsel, Total Marketing Network, UK

Greg Mason is a Partner in FRA. His expertise lies in database architecture, database programming and software design, mass data analysis and data mining for the purposes of disputes and litigation. After graduating from Radford University with a degree in Statistics and Mathematics (concentration Computer Science), Greg spent three years performing statistical testing and analysis for the US Department of Defense in order to evaluate the performance of sophisticated defense systems. He then moved to the Disputes and Investigations group at PricewaterhouseCoopers, before co-founding FRA in 1999. Greg has been involved in all aspects of litigation from discovery through to trial. He has extensive experience in the area of reviewing and analyzing massive quantities of data and information via databases in order to report to analysts and litigators. He has particular strengths in unraveling complex data sets and extrapolating to fill data gaps resulting from aged or incomplete data. He has worked directly with lawyers to assist in depositions, drafting of affidavits, developing case strategy and summarizing data for the purposes of presentation to court. His recent work at FRA has included the design and implementation of bespoke databases to analyze areas such as potential liability, commercial vulnerabilities and compliance, as well as e-discovery. He has been retained as an expert to provide evidence on e-discovery and electronic evidence methodology and practice, and database name matching.

Company

Total Marketing Network

About FRA Founded in 1999, Forensic Risk Alliance (FRA) is a full service consulting firm specializing in Forensic Accounting, Financial Investigation, Litigation Support, and Electronic Discovery. FRA is comprised of forensic accountants, financial analysts, database & IT experts, and litigation support specialists. We have fluency in German, Chinese, French, Spanish, Italian, Portuguese, and English. FRA assists businesses and institutions to resolve complex and high risk financial, legal and regulatory challenges. We offer a variety of solutions that encompasses the complete e-discovery life cycle. We offer collection services, data culling, a custom review platform, jurisdictional processing and hosting, data privacy, and dedicated project management. From our offices in the United States and Europe we have serviced and supported clients in nearly every major jurisdiction across the globe. Recent projects have taken us to Canada, Israel, Germany, Switzerland, France, the Netherlands, the UK, the US, Spain, Denmark, Norway, Sweden, Belgium, the Philippines, Indonesia, Thailand, the PRC, Nigeria, Iraq, the UAE, Jordan, Brazil and Australia.

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