Take a brief mental journey and step back in time to early 2020 when the coronavirus, as it was commonly called at the time, first hit the public consciousness. This may spark memories of scrolling through social media, seeing wildly different opinions from different people about potential impacts. Many people were asking, Was this going to be a big deal? Shortly after that, it became clear that it was definitely a big deal.
The pandemic happened so quickly, in fact, that organizations had very little time to prepare. In particular, the shift from employees working in the office to working from home was jarring for many employers. Many organizations had internal controls that relied on physical sign-offs or were simply not designed with remote work in mind. There were workarounds, band-aid solutions, and just a general mentality of throwing caution to the wind because they Forvis Mazars most commonly sees fraud is the accounts payable process. Other areas where we often see fraud include the payroll and purchasing card processes. Leveraging analytics is a great way to proactively search for fraud. In fact, in the 2022 ACFE report, proactive data monitoring/analysis was the number one anti-fraud control in terms of reducing the length of time of a fraud, which can help reduce the overall total dollar loss from the fraud. Surprise audits and job rotation/mandatory vacation were the second and third top anti-fraud controls to help reduce the duration of a fraud scheme.
Second, reassess your internal processes. You could focus on just the changes that took place because of the pandemic, but careful consideration should be given to whether it makes sense to look at all the controls related to a particular cycle, because there could have been control gaps in place prior to the pandemic as well.
The world has changed dramatically over the last several years, and in many ways, these changes have increased the risk of fraud. What are you doing to combat this increased risk?
If you have questions or need assistance, please reach out to a professional at Forvis Mazars or submit the Contact Us form below.