IBD Fraud Presentation
Transcript of IBD Fraud Presentation
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India Business Database.com
PREVENTION IS BETTER THAN CURE
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FRAUD
“Fraud is simple- concealment methods make it complex”
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TYPES OF FRAUD
Fraud
Misrepresentation or
concealment of material
facts
Bribery
Conflict of interest
Theft of money or property
Theft of intellectual
property
Breach of fiduciary
duty
Statutory offences
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COST OF FRAUD RISK
US organizations loose 7% of their annual revenues to fraud.
Fraud schemes continue for years before being detected most likely by tips than by audit
Financial statement fraud are very costly
ACFE fraud risk report
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FRAUD RISK IS UNIVERSAL
Banking is one of the most
common industry to be
affected by fraud.
Small businesses are very vulnerable to occupational
fraud.
Fraud is mostly committed by
Accounting Department &
Upper Management
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AUDIT VS FRAUD EXAMINATION
Audit Fraud Examination
Objective Expresses an opinion
Establishes who is responsible
Methodology Examination of financial data
External & Internal financial and non-financial data
Presumption Professional Skepticism
Based on proof
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•360o
knowledge on the subject
Corporate Intelligence
•Benchmarking competitive environ
Business Credit Analysis
•Forensic analysisInternal Audits
•Review and Implement
Internal Controls &
Systems
FRAUD TOOLS
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CORPORATE INTELLIGENCE
Analytical process
Related party dealings
Forensic accounting
Monitor business environment
Who can use it?•Regulatory Bodies
•Banks & Hire Purchase companies
•Venture Capital/ Private Equity
•M&A Transaction
•Corporations
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BUSINESS ANALYSIS
KNOW BEFORE YOU DEAL
Who can use it?
•Extending credit
•Customer relationship management
•Supplier chain management
•Competitive analysis
Operational, financial and
market analysis
Standardized process of
collecting data
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INTERNAL AUDITS
Who can use it?
• All kind of organizations
Benchmarking
Evaluate processes to determine financial &
non-financial data.
Examine internal
documents
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DESIGN INTERNAL CONTROLS
Control environment & activities
Risk assessment
Communication & Monitoring
Designing Robust Processes
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RISK SCORECARDS
Evaluates financial & non-financial data elements
Z testing for population
Industry performance benchmarking
Generic for all types of business units
Proprietary Risk
Scorecard
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BENEFITS
Managing financial risk
Business loan portfolio & credit lines
Vendor continuity program
SME business analysis
Detecting fraud
Locating misappropriation of assets
Monitoring activities
Achieving objectives
Aligning risk with strategy
Optimize product pricing
Managing multiple risk environment
Enhancing risk response
Reducing operational losses
Identifying and seizing opportunities
Improving capital efficiency
Compliance & Reporting
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CASE STUDY: SPECIAL AUDIT
Client: Pharmaceutical
Major
Subject: Information
Security
Case Observations
•Gate & Key management
•Email, Fax & Scanner blocking
•Surveillance
Tool: Forensic
Accounting
Recommendation
•Technology recommendations
•SOP manual & Employee training
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CASE STUDY: MISREPRESENTATION
Client: Banking
Company
Subject: Hosiery
Manufacturer
Case Investigation
•Sham facilities
•Fabricated documents
•Promoter under investigation by Federal Agencies
Fraud Tool: Corporate
Intelligence
Client Benefit
• No facilities were extended
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CASE STUDY: FICTITIOUS ASSETS
Client: Banking
Company
Subject: PVC
Flooring Company
Case Investigation
•Over statement of receivables & inventory
•Export Benefit certificates not available
Fraud Tool: Internal
Audit
Client Benefit
• Subject business was forced to pre-close account.
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CASE STUDY: BACKGROUND
Client: Global Trading
Company
Subject: IT Support Service
Provider
Case Investigation
• Promoter involved in another business that was defaulter with banks
Fraud Tool: Business
Credit Analysis
Client Benefit
• Extended safeguards were created
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CASE STUDY: PAYMENT DELAYS
Client: Global Trading
Company
Subject: Hatcheries Company
Case Investigation
•Delay in payments to the trade
•Earmarked “Sub-Standard” asset with the banks
Fraud Tool: Business
Credit Analysis
Client Benefit
• Further limits were not extended.
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CASE STUDY: BUSINESS DEVELOPMENT
Client: Machine Tool Manufacturer
Subject: Identificati
on of prospective
clients
Case Methodology
•Database filter
•Feedback form
•Credit Check
Research Tool:
Marketing Solutions
Client Benefit
• Identification of new credible clients
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PEOPLE
• Merit-holder, Fellow Chartered Accountant
• 22 years in Financial services & Risk management
Vivek Parti, Chief Consultant
• Management graduate
• Twenty yearsexperience in consumer retail, automotive aftermarket, consumerdurable and office automation industries
Arun Lamba, Senior Consultant
• Merit-holder, Fellow Chartered Accountant
• Tax expert with 20 years of experience
Sanjeev Puri, Senior Consultant
• Retail experience
• Project management
Sonia Parti, Practice Leader
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INFRASTRUCTURE
Scalable data centre in the Indian national capital region
All-India data collection network
Connected to global databases
Established data reporting templates
Proprietary risk management model
Global clients across different industry verticals
Data protection and privacy policies
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Value Proposition
Cost Rationalization
Better
Quality
Our
Value
Proposition
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ASSOCIATE
Audit & Assurance
Forensic accounting
IFRS implementation
Compliance & XBRL filing
Tax Advisory
Business research
Partner search
Strategic & Financial
consulting
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91.120.2569761-63
A-166, 2nd Floor, Defence Colony, New Delhi 110024
B-16, Site-C, Surajpur Indl Area, Greater Noida 201306
• http://www.indiabusinessdatabase.com
• http://www.indiabusinessdatabase.com/blog
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