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Tracking Down Fraud Now In Demand

By on June 16, 2009 in Industry News with 0 Comments

Following is a good article about recognizing, adding oversight and gaining visibility into your corporation’s expense policy & procedures.

Tracking Down Fraud is Now in Demand

The Atlanta Journal-Constitution
Sunday, May 24, 2009

Patrick Taylor is a conniving worker’s worst nightmare. The Atlanta fraud expert is called upon a lot these days to help companies sniff out fake sales transactions, bogus expense reports, illegal kickbacks and those trying to cook the company books.

“There’s a lot of pressure on companies and individuals,” said Taylor, chief executive of Oversight Systems. Home and stock values have fallen and consumer debts have risen. Companies are held to much higher accounting standards and under laws such as Sarbanes Oxley.

Consequently, “When people are under financial pressure there’s more of a temptation to cross the line,” said Taylor. That line usually traverses the company’s bottom line.  “You find the way to justify taking money from the company.”

Worker theft, fraud and pilfering has increased during this recession, according to a recent survey of 507 certified fraud examiners. More than half said the number of frauds they’ve investigated during the past year has grown, and, 49 percent said they’ve seen more money lost to fraud.

Taylor and his team spend a lot of time, with the help of software, combing through a company’s daily transactions looking for fraud, abuse or human error, all of which are costly.

Taylor has built a career on fraud-busting, having worked at Internet Security Systems before running Oversight. Oversight’s board and workforce includes a number of former ISS people.

The software Taylor’s company uses acts as a “virtual auditor” often finding human errors and missteps.

Carpet and flooring giant Shaw Industries Group Inc. uses the process to help keep mistakes such as duplicate invoices or overpayments to a minimum. No small feat for a $5 billion company with some 25,000 vendors.

“We’re finding personnel keying errors on a more timely basis,” said Jim Kirkpatrick, Shaw’s director of internal audit. A task that would have “involved going through tons and tons of data” in the past.

Even though fraud is rampant, Taylor says companies are reluctant to talk about the problem for fear of embarrassment. Most let the offending worker go without trying to recover the losses.

Taylor has uncovered lots of fraud but one case he found particularly “repugnant” involved a woman who told her company she had cancer. Instead of getting treatments, she spent her sick days at a spa where she charged the expenses to her company credit card and got reimbursed for medical expenses. “That turned my stomach. That’s just wrong in so many ways.”

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