GUEST BLOGGER
Mustafa Yusuf-Adebola, CFE, CPA, CIA

With the news of a global pandemic and looming recession, there have been different responses from both government and private organizations across the world. Not a lot of people foresaw such an event occurring nor did they have this in their yearly forecasts and budgets — that work would be restricted, stay-at-home orders would be enforced and nonessential services would take a back seat.

Of course, along with all the bad news comes pressure — (mental) health, financial and otherwise. Pressure is one of the variables in the Fraud Triangle that motivates individuals to commit fraud. Companies as well as individuals will face pressure, thus making this variable highly important in fraud management.

Fraud risk management (FRM) generally consists of fraud prevention, fraud detection and fraud response. While a reactive FRM system has more detection and response work to do, a proactive FRM system is constantly putting in place plans to prevent the fraud from occurring. Here are five tangible actions your organization can take to continue proactive fraud risk management during a crisis.

1. Reassess the FRM framework

Every risk management system involves an environmental scan of the organization to see where the risks and controls are. While some are planned annually using the calendar year, others follow the reporting period of their organizations. During a period of uncertainty and constant changes, this is a good time to re-evaluate the FRM system for emerging threats fraud risks.

2. Keep and maintain a log of policy announcements

This period has witnessed a lot of policy announcements, changes and restrictions from governments across the world. Equally, organizations have responded by making adjustments to daily business activities. Exemptions have been granted to some existing policies and procedures; controls have been relaxed. This log will also be important during future audits and reviews after the crisis.

3. Keep tabs with other departments

Legal, human resources, supply chain, IT, communications and just about every department have witnessed changes. Some are constantly in the spotlight. For example, payroll needs to pay staff. Communications ensures that corporate messages are aligned. Procurement still needs to purchase essential items. Cybersecurity risks continue to be an IT risk, but with employees working from home longer than expected, there are greater possibilities of online theft, phishing and other financial crimes. It’s important to engage other departments within your organization to keep up and provide expertise from a FRM viewpoint.

4. Provide training and sensitization

Who is interested in training right now? With the panic and uncertainty around, the attention span may be lessened, but employee training does not need to be. This period provides an opportunity to keep employees sensitized so as not to expose organizations to vulnerabilities or fraudulent schemes. As you follow the news, pay attention to fraud risks peculiar to your organization — draft snippets or newsletters, get creative in your communication style to ensure the message is passed and quickly assimilated. There is no “one size fits all” strategy, but it is important to understand how your employees react to information. I have reviewed some organizations where email newsletters are usually overlooked by employees, so IT got the attention of its staff by deploying pop-up messages.

5. Analyze trends with data analytics

Forensic data analytics will become useful to analyze trends and patterns during and after this period. It is important to note that to analyze data, you must first start with keeping data. Some of the aftermath of this crisis may not emerge until after six to nine months or even years. However, when analyzing data, it is important not to lose sight of real-life events occurring during the period to avoid misinterpreting results when they are actually false positives.

Overall, when there is a crisis, keep calm and do not lose your head. Otherwise, you could become the crisis.

We understand things are still changing and evolving on a daily basis. To help centralize all of the updates and provide one helpful location for relevant resources, we've created a COVID-19 resource page for ACFE members.

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