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CFOs: Don’t Just Monitor to Prevent Fraud, Act on the Insights

on December 06, 2013

A recent CFO article detailed how CFOs can stay ahead of the game by monitoring specific areas for employee fraud. Among the top 5 areas where employee fraud commonly occurs included purchase-to-pay, corporate credit cards, payroll, sales and receivables, and information systems and critical data. While it is essential to monitor in these areas to stay ahead of fraud, we find the action that follows monitoring is key to successfully fighting fraud and compliance efforts in general.

First we have to validate the findings to avoid false accusations. For bona fide fraud we have to open a case and typically invoke other departments such as HR and legal. For relatively minor policy infractions (think abuse as opposed to fraud) an email to the transgressor and their manager will correct the behavior and let it be known that you’re watching. These transgressions should be tracked through time so that repeat offenders can be identified and stringently addressed.

If you’re not acting you might as well not monitor either. Both activities must be done on an ongoing basis to be effective, as spot checks and samples will most likely miss fraud. To perform this at scale, leverage technology to make it efficient.

Patrick Taylor

Patrick Taylor is an authority in the convergence of business analytics, information security, and the implementation of technology to boost organizational performance. An innovator in his field, Patrick founded Oversight Systems in 2003 and served as President and CEO for 15 years. In this role, he helped hundreds of Fortune 1000 companies improve financial, accounting, and auditing processes. Previously, Patrick held leadership positions with Oracle, Symantec, and Internet Security Systems (ISS). Patrick has a bachelor’s degree Mechanical Engineering from Georgia Tech and an MBA from the Harvard Business School.