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Summit Forensic

Fraud Prevention & Detection


Association of Accounting
Technician of Uganda.

Mugisa Mustapha
CFE, CrFA, ACCA, CISA, CPAU, MBA.
Contents
Introduction to fraud
The fraud triangle and how it relates to your
organisation
How fraud occurs at work place
Combating staff fraud, vetting and security
screening
Consequences of staff guilty of fraud and
treatment of fraud suspects under the laws of
Uganda

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An introduction to fraud
In any
organisation, small
proportion of staff
act dishonestly
Makes a gain
and/or causes
loss to the
The act is organisation
Abuse of
intentional
position of
trust
Fraud by Fraud by false
wrongfully failing representation
to disclose
information

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The fraud triangle for occupational
fraudsters Given the right pressures,
Motive/ opportunities and
Incentives/ rationalisations, many
pressures employees are capable of
Fraudsters have a committing fraud
motive, exploit an
opportunity, and
usually rationalise their
actions

Attitude/ Opportunity
Rationalisation

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Proving guilt
To prove a staff is guilty of
fraud, all the three things
must be proved.
Motive

Means Opportunity

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How fraud occurs at work place

Ineffective or nonexistance
ethics compliance programme
Lack of control over
management by directors
Collusion between employees 2002
and management
2004
Management override of
internal controls 2007

Inadequate internal controls


Collusion between employees
and third parties
0 10 20 30 40 50 60 70

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Identified fraud within most organisations
Employment Most employees
mispresentation Other
5% 10% easily steal
assets. This is
common in
Private use of many Ugandan
Co. assets Theft of stock & companies
15% assets
50%

Payroll fraud
20%

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Staff fraud threatens everyone
When the going
gets tough, the
tough gets
careful

Adverse
internal
Regulatory impact
implications
Reputational
Financial damage

losses

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The burden on a company for
existence of fraudulent staff

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A typical organisation loses 5% of its
annual revenues to occupational fraud
Medical/ insurance Financial reporting
fraud fraud
7% 4% Employee fraud is
on the rise
Misconduct
9%

Employee fraud
35%

Computer
crime
11%

Procurement
fraud
Vendor related, third 19%
party fraud
15%

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Combating staff fraud
Nearly two-thirds of staff
frauds where a motive was
reported have been as a
result of greed and the
desire to lead a lavish
lifestyle. A further 11% liked
to gambling and 10% to pay
debts
Fraud stop
The profile and strategies
common
Why staff characteristics
commit fraud shared by staff
fraudsters

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Combating fraud
Greed and employees desire to fund a
lavish lifestyle (fraud triangle) leads to
fraud. Lack of background checks on
staff and admission of staff by a
relative
Fraud stop
strategies
Profile of
fraudsters
Why staff
commit fraud

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Combating fraud
Young (under 25 years), mostly male,
employed full-time, in their current
employment, low paid, possibly in financial
difficulties Female fraudsters are few BUT
do it excessively.

Fraud stop
strategies
Profile of
fraudsters
Why staff
commit fraud

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Combating fraud
-Vetting and security screening know your staff
- Internal corporate culture Zero tolerance for fraud
- Monitoring staff & fraud awareness
- Effective policies to respond to identified fraud
- Analysis and deterrents
- Fraud hotlines & suggestion boxes
- Zero tolerance for fraud policy
Fraud stop
strategies
Profile of
fraudsters
Why staff
commit fraud

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More frauds are detected by tips than by any other
method.

40% of detected
frauds is by tipping/
whistle blowing

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Consequences of staff guilty of
fraud
Organisational fraud policy
The future
Suspected employees may be placed never just
on suspension on no pay during
investigation happened. It
Subject employees to disciplinary
proceeding. Record names in the black
book
was created

Will & Ariel, The Lessons of History

Depending on the case, suspects can


be reprimanded, suspended,
terminated or institute legal actions
(civil or criminal)
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Consequences of staff guilty of
fraud
Laws of Uganda

You could
Prosecute evidence is sufficient to get up to 10
sustain a charge. Person is punished
prohibitive. Co. institutes a complaint years in


through police, etc
Litigation under civil law sue for
prison
Ugandas Penal Code
recovery of damages and loss
occasioned. Institute a case in court
privately through lawyers, etc
Terminate employee

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Before you are involved in fraud

See your self in the mirror.


The consequences are never
easy

Fraudsters are never happy

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The final word
There is only
one success
in life: To be
able to live
To be ethical and
your life the trustworthy and leave
a clean record!
way you
want.

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Q&A
?
For more information:
Summit Consulting Ltd
2nd Floor Rm 3, Kamu Kamu Plaza
Entebbe Road
P.O. Box 40292, Kampala
Tel: 0712984585/ 0782 610 333.
www.summitcl.com or www.sbreview.net
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