Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
Insider fraud found during a quarterly financial report
A US department store chain has recently revealed that an employee concealed between $132 and $154 million in delivery expenses, which constituted 3.5% of the company’s overall delivery expenses. The fraudulent activities were discovered during the preparation of quarterly financial report.
In an official statement, the department store disclosed that the employee, responsible for small package delivery expense accounting, intentionally made erroneous accounting accrual entries to hide approximately $132 to $154 million of cumulative delivery expenses from 2021 through to the end of fiscal quarter in November 2024.
The investigation revealed that the employee did not act for personal gain but to cover up an accounting mistake made in late 2021. To obscure this error, the employee continued to make intentional accounting errors and falsify documents.
Company Responses and Future Measures
The company has stated that it will strengthen its existing controls and implement additional measures to prevent this happening in the future. The company is also revisiting its internal accounting processes.
Importance of Financial Controls
The incident underlines the importance of financial controls and oversight in the payables process. Such scenarios could be significantly mitigated by using dedicated accounts payable risk detection software. Such software protects working capital through continuous monitoring and highlights risks of duplicate or fraudulent invoices to the team for further investigation.
How FISCAL helps you prevent fraud.
Our software solution makes it easy to identify fraud risks and take action faster. Using advanced forensics and AI, our platform examines vendors and transactions to identify fraud risks. Those checks include:
- Identifying unusual invoices, such as round amounts, and exceptions or inconsistencies.
- Employee-to-supplier credential matching.
- Checking the master supplier file for issues including dormant accounts, changes and duplicate vendors.
- An audit trail to discover who has made changes, and when.
We also provide a supplier cleansing service.
Using our fraud prevention software allows greater control around your spend, and who you spend with. It gives a high level of oversight, giving you peace of mind.
