COVID 19 related Fraud risks
9/1/2020

The presenter Dr Sridhar Ramamoorti is Professor at the University of Dayton, USA and specializes in risk advisory services, fraud risk detection. Dr Sri was 2010 Co-Chair of the IIA's global CBOK study and a co-author of Internal Auditing Textbook.  The other presenter Victor  Hartman is an attorney, CPA, and former FBI Special Agent, who specializes in internal investigations, forensic accounting, and fraud mitigation consulting. Vic is also a Professor at Georgia State University. He is the author of the book, 'The Honest Truth About Fraud.'

Fraud life cycle consisting of Prevention, Detection, Investigation, Mitigation and Remediation was elucidated by Vic to point out how internal audit can play a crucial role in different phases. Fraud risk definition, taxonomy (Fraud tree), threat picture broadly forms corruption, assets misappropriation and financial statement fraud and its plethora of areas with the scarcity of skills to detect were explained for internal auditors to scale up.

The Covid19 related frauds were identified primarily Procurement Fraud, Advance Fee Scheme, Business Email Compromise (BEC), Bogus Medical Products, Substandard medical products & equipment (PPE), Government Assistance Program Fraud, Hoarding & Price Gouging, Repurposed Frauds, Frauds to Gain Personally Identifiable Information (PII) and Charity Schemes. There is a high vulnerability with the Work From Home situation.

"Greed is not a G-word' said Dr Sri, as he explained why people commit fraud. Affects (innate emotions), Peeling the Onion (layers), Business need, Ego, Excitement, Parity, Reciprocity, Status, Slippery slope were identified as the main motivators for fraud.

"According to the ACFE 2020 Report to the Nations global survey, internal auditors worldwide are the true heroes in the fight against fraud!. The survey estimates fraud $4.3 trillion which is mind boggling. Fraud mitigation measures should be aligned to motivators of fraud by consciously learning from case studies, research and talks. The stakeholder's expectations from internal auditors is huge" said Sundaresan Rajeswar, IIA Qatar Board Member.

Fraud prevention methods listed are COSO 2016 FRM Framework, Sentencing Guidelines, IIA's Three Lines of Defense, Hiring Practices, Ethics & Compliance Policies, and Training. Fraud deterrence measures are Policies for Code of Conduct, Conflicts of Interest, Culture/Ethics Assessment, and Fraud Risk Assessment. Fraud detection consists of Employee awareness, Ethics Hot Lines, Whistle-Blower complaints, Escalation Protocol, Continuous Monitoring and Behavioral Forensics

Fahad Hussien, Senior Vice President of the IIA Qatar, welcomed attendees from different parts of the world and emphasized members to attend such sessions to enhance their knowledge and bring out changes in their work. Fahad also mentioned Cybercrimes during the pandemic and Regulatory changes as upcoming events for Sept. 2020. Girish Jain hosted the event with Murtaza and Muralikrishna. Rajeswar handled the Q&A segment.