COVID-19 and the Fraud Triangle

By Sachin Maharaj CFE

The COVID-19 pandemic has forced lock-downs and restrictions bringing world economies to a standstill.

It is widely expected that many businesses will not recover, resulting in many job losses. Unfortunately, these challenges generate the perfect conditions for occupational fraud.

Pressure

The number of unemployed is increasing drastically. Companies that are  trying to remain afloat are laying off employees.

Opportunity

By downsizing to ensure survival, Companies are reducing or removing internal controls, checks and balances. Streamlined processes coupled with remote working often reduces the need to collude to commit fraud.

Rationalization

Withdrawn incentives, bonuses, benefits, resentment about being made redundant, and reduced pay,  allows otherwise honest employees to rationalize committing fraud.

The Forensic Restitution team specializes in conducting Fraud risk assessments and Data analytics, to assist your company with a focused, proactive effort to detect and prevent fraud.

Fraud Risk Assessments

A Fraud risk assessment helps you identify what makes your organization vulnerable to fraud. Using the assessment, your company can determine where fraud is most likely to occur, enabling you to implement proactive measures to reduce the chance that a fraud occurs.

Testing using Data Analytics

Data Analytics identifies, exposes and demonstrates relationships, trends and patterns in complex data sets to assist with identifying red flags in the areas that pose the greatest risk; to find the footprints of potential fraud or error. This information can be used to aid litigation or criminal investigations.

 

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