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We live in an environment of an unforgiving, testing economy where desperate people need more income, and at the other end of the scale an age of instant gratification and entitlement, roughly translated as greed.

Smartryk Calitz, Head of Mubesko Africa’s Forensic Investigation unit lists some examples of fraud, and the possible consequences of fraud in a company.

Types of fraud.

  • Insurance fraud: Making false or inflated claims.
  • Tax fraud: Devious reporting of income to reduce or remove tax liabilities.
  • Identity fraud: Using someone’s identity to access finance illegally.
  • Accounting fraud: Intentionally misrepresenting income, profit and expenses to inflate profit and mislead investors and other interested stakeholders.
  • Billing fraud: Submitting bogus statements of goods ordered or expenses raised.

Ramifications of fraud.

  • Loss of reputation and confidence: When fraud is uncovered it has a halo effect, suggesting that the wider company’s governance, processes, controls and even ethics are questionable.
  • Financial loss: This can range from actual company losses through to making compensation, and the cost of legal representation and forensic investigation.
  • Orange overalls: Jail time!

“The cost of fraud is high yet in most instances sound governance, effective processes and adhering to accepted accounting and auditing practices can discourage company fraud or at least catch it early before it snowballs. As experience forensic investigation professionals, Mubesko Africa can examine your current controls and processes, and help you to close gaps”.

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