Occupational fraud – many lessons learned

Going on for 12 successful years, the South African Chapter of Certified Fraud Examiners hosted the largest and leading anti-fraud event in Africa, and second-largest in the world. During the conference, the chapter succeeded in gathering Corporate Decision Makers, Influencers, Exponential Thinkers and Ethical Leaders – the event gathered a truly international and multi-industry community of professionals to network, benchmark and enhance innovative techniques to effectively eradicate White Collar Crime.

Gathering nearly a thousand anti-fraud professionals from more than 20 countries, this year’s event was a truly spectacular and premier event facilitating anti-fraud training and education. The wide range of topics touched on nearly every facet of occupational fraud – Subjects as diverse as “The President’s Keeper” to Civil Society’s contribution in fighting corruption, with sessions for all levels of experience.

Our own Stephen van Coller presented Ethical versus Unethical Leadership on day two of the conference, a presentation worthy of the several applauses and positive remarks from the delegates. With honesty and transparency, Stephen shared seven lessons he had learned since he joined EOH just over a year ago and he coined the old saying that “life must be lived forwards, but can only be understood backwards”.

    Occupational fraud is committed from within, against the business by its own officers, directors, or employees. More than 40% of these transgressions globally are detected through whistleblowing initiatives and I shared some insights on how to effectively manage occupational fraud, especially when you make it easy and safe for whistleblowers to report.

    To illustrate this, we opened the ExposeIt application, a product of XTND’s, for delegates. The plan was for the delegates to experience the user-friendliness of the ExposeIT solution, and to see for themselves that it is as it promises, a truly anonymous and confidential reporting platform. The XTND team broadcasted daily questions on the platform referencing a speaker of the day. Around 35% of the delegates eagerly participated in providing answers to the questions in the hope to win one of three sets of virtual reality glasses. The feedback was overwhelmingly positive, especially coming from fellow fraud-fighters and several messages were along the line of “This app is truly anonymous and easy to use”.

    Occupational fraud is a reality in South Africa, as it is globally. The latest report to the nations of the ACFE indicates that the average corporate loses 5% of revenue due to occupational fraud. This increases to around 20% in small to medium enterprises. EOH is accordingly more exposed than normal large enterprises because of the many small and medium enterprises combining as one EOH.

    As Einstein said: “You can’t solve today’s problems with the same thinking that created them”. Exponential thinking is necessary to reestablish an ethical culture in EOH – “a culture that promotes honesty, integrity, respect, responsibility and accountability” – as said by Stephen van Coller.

    Human beings are not born to be corrupt. Organisations don’t commit fraud, people do. There are many excuses when those involved in fraudulent activities are exposed, blaming circumstances, the environment, the community, or anything else, but hardly ever do they admit that they joined unethical actors to also get a share of the better life.

    Fraud knows no boundaries, regardless of the industry and size of the company. Fraud prevention should be the responsibility of every individual and we hope to see everyone in EOH participating in International Fraud Awareness Week from 17 to 23 November 2019. The International Fraud Awareness Week encourages business leaders and employees to proactively take steps to minimize the impact of occupational fraud through promoting anti-fraud awareness and education.