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Fraud & Loss Prevention

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AppliedG2 can be contracted to establish, maintain and customize information security controls to provide cost effective fraud protection that is responsive to the confidentiality, integrity and availability needs for information or assets owned by or in a your custody. As Certified Fraud Examiners (CFEs) we know that despite sound system design, trusted implementation and good employee security awareness training that determined individuals can still steal from your business.

According to the latest Report to the Nation on Occupational Fraud (Source ACFE 2010) the typical organization loses 5% of its annual revenue to fraud. The reported median loss was $160,000 with over a quarter of the frauds involving losses over $1,000,000. In the majority of the cases, the activity went on for 18 months before being detected. Small organizations are disproportionately victimized by occupational fraud, typically lacking anti-fraud controls compared to their larger counterparts. 80% of the frauds were committed in one of six departments: accounting, operations, sales, executive/upper management, customer service or purchasing. More than 85% of fraudsters had never been previously charged or convicted for fraud-related offenses.

The ACFE has some recommendations for reducing the likelihood and impact of fraudulent activities:

1) Don’t rely exclusively on external audits to detect fraud.

2) Educate employees on how to identify fraudulent activities and provide clear direction on how to report any suspicious activities (e.g. employee hotlines)

3) Utilize internal controls effectively, but also build in provisions to detect fraud when these controls are circumvented

AppliedG2 can assist in verifying that compensating controls, forensics and reporting mechanisms are properly implemented to reduce the likelihood of fraud losses. Simply having a very visible and proactive anti-fraud program will serve as a major deterrent to would be perpetrators. Remember the threat is typically originated with an insider, often with the assistance of outside parties.

Our ability to develop a blended response of IT and Physical compensating controls provides a unique advantage to our customers. At AppliedG2, we have taken the time to understand and document key processes for our clients in an effort to understand how fraudulent activities can go undetected and compensating controls can be bypassed. Simple administrative steps like proper segmentation of duties and access to physical devices are only the basics that must be enhanced to detect and deter fraudulent activities. Emerging technologies like geo fencing, RFID tags, discrete packaging and secure off-site storage solutions for CCTV video and security logs provide a greater array of protection than was even available to government agencies even a few years ago.