Fraud Prevention and Detection for IT Professionals

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1 Fraud Prevention and Detection for IT Professionals Netsecure 2011 Conference Sandra Rolnicki Senior Vice President, March 2011

2 Contents (1) Introduction to fraud concepts (2) How control weaknesses are exploited (3) Preventive and detective controls (4) Red flags or indicators of fraud (5) Conclusion, Resources and Q&A 2

3 (1) Introduction to Fraud Concepts The fraud triangle Personal Professional Pressure Opportunity Control weaknesses - System - Process - People Internal dialogue Rationalization Justification for fraudulent acts Source: ACFE 2010 Report to the Nation on Occupational Fraud and Abuse 3

4 (2) How Control Weaknesses are Exploited Case study application to fraud triangle Pressure Assistant living beyond her means Used corporate card for purchases Opportunities System: Expense system auto-approval Process: Card activity / receipts not monitored People: Missed red flags Rationalization Career fraudster 4

5 (3) Preventive and Detective Controls Preventive System: Duplicate invoice and payment checks System thresholds periodically changed Access that sufficiently segregates duties Process: Detection likelihood and perception People: Background checks for key roles Code of Conduct certifications Ethics hotline Training ethics and antifraud FPO 5

6 (3) Preventive and Detective Controls (cont d) Detective and/or mitigating System: Audit logs Exception reporting Process: Financial statement ratios Threshold analysis Bank and financial statement account reconciliations Operational metrics People: HR audits Management observation 6

7 (3) Preventive and Detective Controls (cont d) Implementing system controls Implement sooner than later - Edit checks, queries, reports, etc. Ask about fraud risk assessment - Brainstorm fraud risks - Identify how to reduce fraud risk Prevent overreliance on system controls - Remember process and people controls 7

8 (4) Red Flags Professional and personal Professional: Staff under stress New staff resigning quickly Always an excuse or exception Excessive control / authority Personal: Always working late Reluctant to take vacation Living beyond apparent means Cozy with customers / suppliers Resists job rotation 8

9 (5) Conclusion, Resources and Q&A Conclusion Fraud is out there and could happen at your company The impact is significant in terms of dollars and time How do we prevent and detect it? - Be aware of red flags - Raise perception of detection - Brainstorm fraud risks - Remember process and people when designing system controls 9

10 (5) Conclusion, Resources and Q&A (cont d) Resources Association of Certified Fraud Examiners: - Bi-Annual Report to the Nation on Occupational Fraud and Abuse American Institute of Certified Public Accountants: - SAS No. 99: Management Antifraud Programs and Controls Questions? - Call or Sandra Rolnicki , sandra.rolnicki@am.jll.com 10

11 Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of $2.9 billion, Jones Lang LaSalle serves clients in over 60 countries from 750 locations worldwide, including 185 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company s investment management business, is one of the world s largest and most diverse in real estate with $41 billion of assets under management. For further information, please visit our web site, Copyright Jones Lang LaSalle IP, Inc. 2008

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