Fraud Prevention and Detection

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Under Fraud Prevention and Detection in the prevention and detection and adequate reaction to be fraudulent activities ( fraud , embezzlement, caused by actions of employees asset losses) (Engl. Fraud ) understood in companies.

Areas of responsibility for 'Fraud Prevention and Detection'

The areas of responsibility can be roughly divided into

  • Fraud auditing,
  • Fraud prevention as well
  • Fraud detection.

Fraud auditing

Fraud auditing comprises the analysis of risky business units, business areas, business processes and sub-processes for fraud. This includes the clarification of fraudulent acts that have occurred in the company as well as the structured examination of internal controls and business transactions at risk of fraud. Furthermore, a damage assessment can be carried out and assistance can be provided in the repatriation of assets. At the same time, the client's lawyers are also supported by litigation PR .

The auditor is not obliged to actively identify fraudulent acts. Within the scope of the statutory provisional tasks of the auditor, the auditor only has to ensure that inaccuracies and violations, which have a significant effect on the presentation of the company's asset, financial and earnings position according to Section 264 (2) of the German Commercial Code, are recognized by conscientious professional practice ( Section 317 Paragraph 1 Clause 3 HGB).

A so-called embezzlement audit may have to be commissioned as a special special audit. The procedure and position of the auditor according to IDW PS 210 differs fundamentally from the procedure for a statutory audit. The implementation of embezzlement audits or other interest-based investigations is problematic for an auditor because it is always guided by a suspicion of his client. According to § 43 Para. 1 S. 2 WPO, the auditor must behave impartially in the auditing activity and the submission of reports, a requirement that requires unconditional neutrality from the auditor in his function as auditor or expert. For this reason, auditors usually carry out so-called shadow audits as part of their reserved tasks . The auditor accompanies the internal auditors or other investigators in their activities, but with complete independence and without a special contractual relationship . The auditor understands the support of the ongoing investigations only as a necessary source of knowledge for the own audit opinion. The auditor has special duties in credit institutions. According to Section 27 of the Audit Report Ordinance (PrüfbV), he must present and assess the precautions taken to prevent money laundering and terrorist financing as well as other criminal acts in the credit institution.

Fraud Prevention

As part of Fraud Prevention , solutions are developed that prevent existing and impending risks of fraud, embezzlement and loss of assets.

The aim is to minimize the likelihood of such cases and the resulting consequential damage through preventive action. In e-commerce it can be necessary to use fraud detection and prevention in real time. This is intended to avert damage to the root cause. An example of how real-time fraud detection and prevention works can be found in the online betting sector or in (mobile) telecommunications. Abuse using Premium Rate Services (PRS) should be avoided in particular .

Fraud detection

Fraud detection includes the identification of risks for fraudulent activities in the company and computer-aided investigation (only permitted under the Money Laundering Act and according to Section 25c KWG) for evidence of such activities. When it comes to detecting white-collar crime in companies, the internal control systems and routine audits are the undisputed leaders with 61% to 68%. Investigations based on suspicion are the exception and only permitted within narrow limits.

Anti-fraud management system

An anti-fraud management system ( AFMS ) comprises the aforementioned three areas of responsibility: fraud auditing , fraud prevention and fraud detection . It is used in larger companies as a company-wide system for the prevention, detection and adequate response to fraudulent acts. These different elements can either be connected to one another or exist independently of one another. An integrated solution can be assumed to be more effective if the mutual dependencies have been taken into account in the planning.

Examples of individual elements

Legal bases

The management of a company is increasingly required to take an active role in the prevention and detection of criminally relevant or company-damaging ("fraudulent") acts in the company. The foundations for this include a.

Auditing standards

literature

  • Thomas C. Knierim, Markus Rübenstahl, Michael Tsambikakis (eds.), Internal Investigations: Investigations in Companies, Verlag CF Müller, 2013, ISBN 978-3-8114-4225-2 .
  • Non-compliance and labor law: Internal investigations, sanctions and claims for recourse after violations of the law and rules by employees; Nomos Verlag, ISBN 978-3-8329-6527-3 .
  • Raoul Kirmes , Private IT Forensics and Private Investigations, two sides of the same coin ?; Josef EUL Verlag, Lohmar, 2012, ISBN 978-3-8441-0204-8 .
  • Horst Clages, (Ed.), Der Rote Faden: Principles of criminal practice (basics of criminalistics), Verlag Kriminalistik, ISBN 978-3-7832-0807-8 .
  • Raoul Kirmes , Forensic Investigation and the Duty of Peace, Journal of the Economic Criminal Law Association (WiJ) ( PDF; 3.3 MB ), issue 3/2013, ISSN  2193-9950 .
  • Reeb, Philipp; Internal Investigations, New Tendencies in Private Investigations, Publishing House Duncker & Humblot Berlin, 2011, ISBN 978-3-428-13777-0 .
  • Hassemer, Winfried; Matussek, Karin; The victim as a persecutor, investigation of the injured person in criminal proceedings, Criminalia, Volume 10, Peter Lang Verlag, 1996, ISBN 978-3631496817 .

Individual evidence

  1. ↑ Melcher, Thorsten; Uncovering of white-collar crimes by the auditor, series: Accounting and Auditing, Volume 18, (Ed.) Baetge, Kirsch, Thiele, Josef EUL-Verlag, 2009.
  2. ↑ Raoul Kirmes, Private IT Forensics and Private Investigations, two sides of the same coin? An analysis of the terms, roles and legal fields of activity for private IT forensics, at the same time laying the foundation for a professional law in private IT forensics; Josef EUL Verlag, Lohmar, 2012, ISBN 978-3-8441-0204-8 .
  3. ↑ Raoul Kirmes, Private IT Forensics and Private Investigations, two sides of the same coin? An analysis of the terms, roles and legal fields of activity for private IT forensics, at the same time laying the foundation for a professional law in private IT forensics; Josef EUL Verlag, Lohmar, 2012, ISBN 978-3-8441-0204-8 .
  4. ↑ Schindler, Joachim; Haußer, Jochen; The duty of legal representatives to uncover irregularities and the reaction of the statutory auditor, WPg, 5/2012, pages 233–246.
  5. ↑ Raoul Kirmes, Private IT Forensics and Private Investigations, two sides of the same coin? An analysis of the terms, roles and legal fields of activity for private IT forensics, at the same time laying the foundation for a professional law in private IT forensics; Josef EUL Verlag, Lohmar, 2012, ISBN 978-3-8441-0204-8 .
  6. ↑ Guideline VÖB, Prevention and Combating of Fraudulent Activities / White-Collar Crime, "Fraud opportunity usually means the absence or ineffectiveness of controls", Boss et al., P. 15.
  7. ↑ cf. Study white-collar crime in Germany 2010 - Focus on SMEs, KPMG Wirtschaftsprüfungsgesellschaft, p. 11, p. 17.
  8. ↑ Raoul Kirmes, Private IT Forensics and Private Investigations, two sides of the same coin? An analysis of the terms, roles and legal fields of activity for private IT forensics, at the same time laying the foundation for a professional law in private IT forensics; Josef EUL Verlag, Lohmar, 2012, ISBN 978-3-8441-0204-8 .

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