On the closing day of the third quarter, Company Z's
financial team began running the numbers to report to executive
leadership and the board on the quarter's progress. While
everything seemed to check out, the team could not help but notice
that the Chicago-based team submitted the exact same number of
expense reports in the third quarter as it did in the second. The
numbers were in line with budget, but looking back at prior
quarters, a pattern of similar expense charges began to emerge. The
question became: should they initiate an audit?
Organizations losing an estimated 5 percent of revenue to fraud
each year, according to the ACFE, with the largest frauds committed by
senior and mid-level management due to their ability to circumvent
internal controls. Needless to say, if an organization senses
something is amiss, it should investigate further to prevent
possible damage to the company's reputation as well as to its
bottom line.
