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Fraud Management

 

Throughout the world, German white-collar crime threatens organisations and companies with fraud. The types of fraud can be varied and cause long-lasting damage. Financial damage (e.g. through theft or fraud) or corruption (e.g. bribery) may occur that have long-term consequences. The larger and more complex the company, the greater the risk of being affected.

 

Thus, the discipline of anti-fraud management attempts to identify and combat white-collar crime in organisations and companies. Thanks to state-of-the-art technologies based on pattern recognition, more and more financial institutions, companies and credit card companies, for example, are discovering transactions that involve fraud. 

 

Common examples are, among others:

- Credit fraud

- Unfair competition

- Investment fraud

- Criminal acts under company law, e.g. Companies Act, etc.

 

One of the most well-known cases is that of Enron in the United States. Due to its generous balance sheet manipulations, there is now nothing left of this once model company. Thousands of employees became unemployed and the company’s reputation was permanently damaged. Consequently, the Sabanes-Oxley-Act (also known as SOX) was enacted, which strives to improve the reporting of companies in the USA.

 

According to a study by PwC, 47 % of companies worldwide have been victims of white-collar crime in the last two years. Companies must therefore create a culture of compliance, which is informative, educational and, thanks to internal rules and guidelines, a deterrent. Furthermore, employees should be able to report white-collar crime anonymously and confidentially using a whistleblowing system.

 

See PwC Deutschland at: https://www.pwc.de/de/managementberatung/forensic-services/fast-jedes-zweite-unternehmen-von-wirtschaftskriminalitaet-betroffen.html (accessed on 03.06.2020).

 

See Haufe Group at: www.haufe.de/thema/wirtschaftskriminalitaet/ (accessed on 03.06.2020).