Anti-fraud Strategy Research Articles

Bribery and Corruption: The COSO Framework, FCPA, and U.K. Bribery Act

Long-established major U.S. corporations such as McDonalds, Walmart, and Proctor and Gamble continue to derive a majority of revenues from foreign operations. In addition, a number of relatively new U.S. technology companies such as: Airbnb (2008); Facebook (2004); Snap (2011); Twitter (2006); and Uber (2009), find themselves deep into international markets, often within just a few years of creation, and certainly by the end of their first decade of operation. Increased international commerce results in the potential for greater exposure to global demands for bribery. Bribery and corruption remains a cancer eating away at the ability of nation states to provide for their citizens. Corrupt payments siphons off funds that might otherwise be used to: provide housing; feed the hungry; fight poverty, illness and disease; and educate the masses. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management (ERM) Framework offers a valuable tool in the anti-fraud struggle and in FCPA and UK Bribery Act compliance. COSO’s 2017 update to the Enterprise Risk Management Integrated Framework addresses developments during recent years in integrating risk with strategy into the ERM process. Our paper proceeds in eight parts. First, we discuss the bribery and corruption problem. Second, a discussion of the Foreign Corrupt Practices Act (FCPA) is presented. Third, we describe the U.K. Bribery Act. Fourth, we discuss the development and evolution of the COSO ERM Framework. Fifth, we apply the COSO ERM Framework as an anti-fraud strategy to assist in compliance with the FCPA and UK Bribery Act. Sixth, we discuss the application of Deferred Prosecution Agreements to the FCPA and their relevance to COSO ERM. Next, we explore the likely changes in FCPA enforcement under the Trump Administration. We believe this paper contributes to the bribery and corruption literature by exploring the potential benefits of the COSO framework.

Does Culture Matter in Fraud Prevention Behavior? National Culture Based Study of Indonesian Bankers

The rapid global movement questions on how a person had a worldview and how his behavior was influenced by its culture. International business meant that culture frequently used by social science researchers in the national cultural dimensions and that related to the economic growth of the financial aspect. Fraud prevention predicted to have a relation to a national culture that was on how the organization created ethical behavior through good corporate governance. This survey explored some important concepts regarding the national culture dimensions that tend to strengthen the fraud prevention actions on Indonesian State Owned Enterprises (SOEs) Bank in East Java as well as to develop an anti-fraud strategy that can be used as one of the efforts in fraud prevention. The findings suggest that national culture played an important role in creating fraud prevention behavior with long-term orientation as the key aspects to be considered in creating a successful organization strategy to combat fraud. JEL Classification: D23, F52, K42 DOI: https://doi.org/10.26905/jkdp.v22i3.2139

A Study of 3rd Party Fraud on UK Retail Banking Customers and Anti-fraud Strategy for UK Banks and Building Societies

This dissertation was designed to investigate third-party frauds on UK retail banking customers, including card fraud, cheque fraud, online banking fraud, telephone banking fraud and banking phishing fraud and the fraud risk management frameworks for UK banks and building societies. The most common and prevalent bank fraud is card fraud which is perpetrated in many ways; counterfeit card fraud, card-not-present fraud, lost and stolen card fraud, card ID theft and card non-receipt fraud. The UK bank and building societies are required to have an effective fraud detection and prevention system in place to protect their customers from third-party retail banking frauds. The researcher employed positivism as a research philosophy for this study and used deductive approach to achieve research objectives. The quantitative research method was adopted for this research. However, this research showed some characteristics of a qualitative research method to study the fraud risk management frameworks for UK banks and building societies. Moreover, this research was carried out with the use of secondary data on third-party fraud on UK retail banking customers and UK card payments obtained from the Financial Fraud Action UK and the UK Cards Association from 2004 to 2016. The secondary data were analysed by using the SPSS software and Microsoft Excel. Findings were revealed for third-party retail banking fraud losses from 2004 to 2016. This research was conducted in line the Framework for Research Ethics (FRE) to make sure integrity, transparency and quality of this study. Therefore, findings can be reliable and valid. Irrespective of research limitations, the researcher managed to provide answer for all research questions and made suggestion for future research.

THE EFFECT OF ANTI FRAUD STRATEGY ON FRAUD PREVENTION IN BANKING INDUSTRY

ABSTRACTThe purpose of this study is to examine the effect of anti fraud strategy on fraud preventionin in banking industry. The data are collected through questionnaires distributed to front liners, marketing, and back office. The sampling technique used is proportionale sampling method with 80 respondents. The research data are analysed using quantitative method, particularly explanatory research approach. In this regard, the researchers use Structural Equation Model (SEM) and Partial Least Square (PLS) with Warrpls 5.0 program. The findings of this study show that prevention pillar, detection pillar and investigation pillar have an effect on fraud prevention in banking industry.

Faceless Patrons—Scam stories and anti-fraud strategies

Faceless Patrons—Scam stories and anti-fraud strategies

Modelling Fraud Prevention Process **

Fraud is global social problem and they occur in all activities. The term fraud implies corruption, misappropriation of assets and fraudulent financial reporting. People that commit fraud are inside and outside of organisation. Factors that affect fraud doing are: motive, opportunity, ability and justification. In our region, it can be said that fraud is not individual problem but it’s a case of systematic fraud, especially in public sector by creating monopoly of private over public sector. Costs related to fraud will be difficult to objectively assess. Everyone is sensitive to health care related frauds, from patients and doctors to whole society. For battle against fraud requires political will, effective legislative framework and anti-fraud strategy. Every strategy has to begin with prevention process. Paper presents model of fraud prevention process. Model is based on increasing awareness of all participants about the importance of battle against the fraud, accepting anti-fraud policies and zero fraud toleration, establishing channels for reporting fraud, as well as defining responsibilities of internal audit in evaluation of internal controls, fraud risk assessment, corporate governance and providing recommendations for process improvement.

Analisis Faktor-Faktor Penyebab Fraud Pada Badan Usaha Milik Daerah

The purpose of this research is to analyze the factors that cause the occurrence of fraud in PD BPR Bank Dearah X which is one of the regional owned enterprises of Local Government X and identify the steps ways of fraud prevention which is effective in PD BPR Bank Daerah X. This research uses a qualitative approach with a case study. This study uses the primary data and secondary data. This research uses many data collection techniques by conducting an interview, an observation and a documentation. The results show that the factors that cause the occurrence of fraud in PD BPR Bank Daerah X can be classified into four, namely: (1) the pressure that comes from the external and internal influence, (2) an opportunity or a chance due to the weakness of internal control systems owned by BPR , sanctions are not strict enough for the wrongdoers of fraud, and misuse of authority committed by directors, (3) rationalization, and (4) collusion. The ways of fraud prevention which are done by the management of PD BPR Bank Daerah X and based on the results of interviews conducted by the researchers, can be identified as follows: (1) An improvement of the internal control system in PD BPR Bank Daerah X, (2) An implementation of policy of know your employee (KYE) as an effort of fraud prevention by controlling the aspects of human resources (HR); (3) A creation of a special line of fraud reporting policy;and (4) An establishment of policies and sanction procedures.
 Keywords: Fraud, Regional Owned Enterprises, Fraud Triangle, Anti-fraud Strategy.

Back to basics: fighting fraud and austerity

Purpose – This article aims to focus on the impact of the current austerity measures on UK public sector anti-fraud and financial crime investigative resource capacity building initiative developed over the years to tackle fraud against the public purse. Design/methodology/approach – The article draws on secondary sources of data and available literature on fraud and financial crime. Findings – Fraud is a challenge in the UK public sector but the cut-back on anti-fraud and financial crime investigative resources, given the scale of public sector fraud, the growing emphasis on accountability and the time of austerity with public money more exposed to fraud is arguably a back-door/u-turn policy on zero-tolerance approach in tackling public sector fraud and financial crime. There is the potential of this encouraging more fraud and financial crime against the public sector in the long term if measures are not taken to devise strategies for enhancing anti-fraud and financial crime investigative resource capacity. Research limitations/implications – The research implication for this article is that it opens an avenue for future studies to examine post austerity strategies for strengthening public sector anti-fraud and financial crime investigative resource strategies to deal with emerging fraud threats to UK public sector. Practical implications – This article acts as a reference guide for policymakers to reflect on the long-term adverse impact of the austerity on anti-fraud and financial crime investigative resource capacity and capability in tackling fraud public sector fraud. Originality/value – The paper attempts to present an alternative lens to examining the scale of UK public sector fraud problem rather than relying on headline story of declining fraud in UK.

Digital forensic technologies as e-fraud risk mitigation tools in the banking industry: Evidence from Zimbabwe

The paper investigates digital analytical tools and technologies used in electronic fraud prevention and detection, used in the banking industry. The paper is based on a descriptive study which studied digital forensics and cyber fraud phenomenon using content analysis. To obtain the data questionnaires and interviews were administered to the selected informants from 22 banks. Convenience and judgemental sampling techniques were used. It was found out that fraud detection and prevention tools and technologies would be most effective way of combating e-fraud if they can be utilized. It is concluded that banking institutions should reshape their anti-fraud strategies to be effective by considering fraud detection efforts using advanced analytics and related tools, software and application to get more efficient oversight.

A nonparametric approach to analyzing operational risk with an application to insurance fraud

Nonparametric methods combine most of the advantages of parametric alternatives for assessing risk. We illustrate a new method for addressing quantile estimation with no distribution assumptions. In our case study, the operational risk related to external fraud in an automobile insurance database is analyzed. Alternative antifraud strategies followed by an insurance company are evaluated. Scenarios of plausible fraud detection rates are presented to assess the impact on operational risk reduction. Finally, we discuss the evidence that fraud detection systems effectively mitigate operational risk in the context of non-life insurance.

The new Commission anti-fraud strategy: revamped fight against fraud at EU level

The article considers the implications of the new comprehensive anti-fraud strategy at EU level, which was adopted by the Commission in June 2011 in the form of a policy communication. It describes the character and objectives of the policy, puts it into the context of other related Commission initiatives and outlines its content. It also explains the means of implementation, the role of the different actors and the possible impact on the development of future EU legislation in the area.

Dietary Supplements in Women: Responsible Strategies for Use: With the explosion of dietary supplements on the market, pharmacists can help women select appropriate products and provide education about optimal usage.

Internal fraud in financial companies can have a devastating effect on the economy, once demonstrated in the Savings and Loan Crisis in the US, and the Savings Bank Scandal in Korea. Using path analysis methods, this study attempts to explore direct and indirect pathways among three respective dimensions of ethical culture, whistleblowing policy, and overall evaluation of anti-fraud strategies in two financial sectors in South Korea (i.e., commercial bank vs. small and medium sized depository institutions). The study finds that more vibrant and proactive managerial efforts, such as setting an ‘ethical tone at the top’ and implementing an effective ‘ethics training’ are necessary to develop a whistleblowing policy in an organization, which in return, positively affect the employees' perceived corporate anti-fraud strategies. This finding, in particular, can be beneficial for small and medium sized depository institutions, which require more cost-effective measures to have a competitive edge in financial markets.

Fighting fraud: An evaluation of the government's social security fraud strategy

This article examines the government's strategy for dealing with social security fraud. The Social Security (Administration) Fraud Act 1997 has been enacted to facilitate the detection, prosecution and punishment of benefit fraud. In addition, the government has published a Green Paper on fraud and, more recently, a Command Paper on ‘Safeguarding Social Security’, both of which emphasize the importance of preventing fraud and re-educating the public about its nature and severity. Both papers, however, fail to deal adequately with the motivations to commit fraud and how this may impact on public attitudes to fraud. This article examines public reaction to benefit fraud, and points out that the public have differentiated fraud on the basis of ‘greed’ or ‘need’. I suggest that, if the government's anti-fraud strategy is to be effective, the link between justifiable motivation and public opinion needs to be taken into account.

Detecting, Prosecuting and Punishing Benefit Fraud: The Social Security Administration (Fraud) Act 1997

Social security fraud is currently estimated at £7 billion per year out of an annual socialsecurity budget of £90 billion. The social security system is hugely bureaucratic andadministrative, leaving it wide open to abuse. Obviously there are individuals keen toexploit such vulnerability, but many innocent claimants also fall foul of its rules, quiteinadvertently. In 1997, the Conservative government declared that its anti-fraudinitiatives would save taxpayers £7 billion over the next three years.2 The main plankin the Conservatives’ anti-fraud strategy, which has now been implemented by theLabour Government, was the Social Security Administration (Fraud) Act 1997,designed to make the detection, prosecution and punishment of benefit fraud moreeffective.3 The aim of this note is to examine the legislation previously used in thebattle against benefit fraud, to identify the rationale for legislative change, and toanalyse the problems which arise from this new legislative position.

Corporate Integrity Plan: Are You Ready If the Feds Come Calling?

The Office of the Inspector General is increasing its antifraud strategies. Operation Restore Trust surveys have already resulted in millions of dollars in criminal fines and settlements. No home care organization is immune. Sanctions, criminal sentences, and penalties may be lessened if a home care organization enacts a corporate integrity (compliance) plan. This article addresses federal laws that describe fraud and abuse initiatives in home care and guidelines for corporate integrity plans. Key elements of such a plan are presented. The article will assist all home care organizations in understanding the importance and development of a corporate integrity plan.