The right tools for tracking company fraud – KPMG Forensic Fraud

The nature of corporate fraud may have changed since the onset of the financial crisis but the need to remain vigilant has not, with “digital evidence” now a key tool in uncovering offenders

La naturaleza del fraude corporativo, ha cambiado desde los inicios de la crisis financiera mundial, introduciéndose nuevas herramientas como la “prueba digital”, sin embargo es clave para las empresas mantenerse vigilante en todo momento, comenta Fernando Lacasa Cristina.

Prior to the financial crisis, the most serious frauds usually involved Senior Management using accounting manipulation, fictitious services or related companies, says Fernando Lacasa Cristina, of KPMG Forensic Fraud in Madrid.

“It is now however less easy to hide frauds in a context of corporate losses. The most common offences we now see are by less senior Directors, in support areas, with a big budget or involving at inflated prices,” he says.

Most misappropriations are often still only uncovered as a result of “tip-offs”, or by those companies with a good fraud prevention system when conducting internal reviews. “Where such checks do not exist, the discovery usually only comes when the offender makes some form of mistake or simply by chance.”

The Forensic Fraud team works with companies and law firms depending on how the offence is discovered, explains Lacasa Cristina. When irregularities are suspected but there is a lack of evidence it is most often a company´s legal department that approaches them.

“When a fraud is detected and legal action taken, the issue then becomes one of helping a law firm calculate the value, to demonstrate how it has been carried out, and to produce documentary and expert witness testimony showing how it was covered up.”

Companies need therefore to remain vigilant in order to identify potential or actual frauds, they emphasise, with digital evidence now a vital tool on the detection trail.

“The information contained in companies’ IT systems can be vital so preserving this is crucial,” says Javier García Chappell, Forensic Technologies Manager at KPMG. “Businesses need to have in place the means to uncover any ‘smoking guns’ and part of this is ensuring that employees are aware of the privacy expectations surrounding communications, and the limits of their access to company IT systems.”