Press release
Deliberate market focus drives solid growth
Deliberate market focus drives solid growth for Grant Thornton
Services
Through Grant Thornton Financial Advisory Services we support the ambitions of dynamic businesses and help them grow
-
Transactional advisory services
Find out more about the transactional advisory services of Grant Thornton Financial Advisory Services
-
Valuations
Find out more about the valuations services of Grant Thornton Financial Advisory Services
-
Mergers and acquisitions
Find out more about the merger and acquisition services of Grant Thornton Financial Advisory Services
-
Forensic and investigation services
Find out more about the forensic and investigation services of Grant Thornton Financial Advisory Services
-
Recovery & reorganisation
Find out more about the Recovery & reorganisation services of Grant Thornton Financial Advisory Services
-
Business risk services
Find out more about the business risk services of Grant Thornton Financial Advisory Services
-
Business consulting
Find out more about the business consulting services of Grant Thornton Financial Advisory Services
-
Capital market
Capital market
We assist businesses in developing tax-planning strategies to optimise the tax burden in compliance with the regulation in force
-
Corporate and business tax
Find out more about our corporate and business tax services.
-
Direct international tax
Find out more about our direct international tax services.
-
Global mobility services
Find out more about our global mobility services.
-
Indirect international tax
Find out more about our indirect international tax services.
-
Transfer pricing
Find out more about our transfer pricing services.
-
Litigation
Our lawyers and accountants can manage all defense measures provided not only by the Italian law, but also by EU regulations and conventions
-
Family business
Find out more about our Family business services.
-
Legal
The client can be assisted in every need and with the same care both on important operations or disputes and on simple matters
Related insights:
Through Grant Thornton Operations we help businesses focus on their core business and improve efficiency
-
Back office outsourcing
Find out more about our Back office outsourcing services
-
Business process outsourcing
Find out more about our business process outsourcing services.
-
Compilation of financial statements
Find out more about our compilation of financial statements services.
-
Tax compliance
Find out more about our tax compliance services.
-
Electronic invoicing
Find out more about our electronic invoicing services
-
Electronic storage
Electronic storage is an archiving procedure that guarantees the legal validity of a digitally stored electronic document
-
Revaluation of corporate assets
Find out your civil and fiscal revaluation of tangible, intangible and financial assets
We can manage the entire HR process or individual aspects
-
Human resources consulting
Find out more about our human resources consulting services.
-
Payroll
Find out more about our payroll services.
-
HR News
HR News the monthly information newsletter by Grant Thornton HR
we can provide our clients with dedicated services aimed to increase the maturity and resilience of their businesses
-
Cybersecurity
GT Digital helps clients structure information security management internal functions, also through partially or totally outsourced functions
-
Agile and Programme Management
GT Digital provides support in the adoption and implementation of different portfolio management
-
Robotic Process Automation
Our “BOT Farm” can rely on digital workers able to help clients in routine activities, allowing employees to deal with more added-value activities
-
Data strategy and management
GT Digital can support clients in seizing the opportunities offered by Big Data, from the definition of strategies to the implementation of systems
-
Enterprise Resource Planning
We support clients in selecting the most appropriate ERP System according to their specific needs, helping them also understand licensing models
-
IT strategy
GT Digital supports clients in making strategic choices, identifying innovation opportunities, comparing themselves with competitors
-
IT service management
We can support with software selection and with the implementation of dedicated tools for the management of ICT processes
-
DORA and NIS 2
The entry into force of the DORA Regulation and NIS2 represents a major step towards the creation of a harmonised regulatory framework
Occupational frauds: the role of the internal control system
Occupational frauds: the role of the internal control system
An adequate level of awareness of the elements that contribute to the perpetration of frauds is the first step to avoid being caught unprepared.
The ‘Report to the Nations 2018’ survey conducted by ACFE provides a useful insight, as it reviews real fraud cases occurred at a global level and analyses all the relevant aspects to identify the critical issues that may have led to the perpetration of the fraud or the duration of the fraudulent activity over time.
Anglo-saxon literature defines the three elements that must be present for a fraud to occur as the ‘Fraud triangle’:
- pressure: managers or employees feel some form of pressure pushing towards fraud
- opportunity: the lack or inadequacy of internal controls provide an opportunity to perpetrate the fraud
- rationalisation: the fraudster manages to justify its conduct as compliant with his/her personal code of ethics.
One of the critical issue identified by the ACFE survey is the inadequacy or lack of a proper internal control system. Indeed, it represents the opportunity – as defined in the ‘Fraud Triangle’ – for the perpetrator to commit the fraud.
As reported in the ACFE survey, 30% of the frauds have occurred for lack of internal controls, while 19% of the cases involved fraudsters who managed to override existing controls within the organization.
As further evidence, the chart below shows the main reasons that contributed to the occurrence of frauds:
The chart below, sourced from the ACFE survey, provides an insight about how the lack or inadequacy of the different steps in the internal control system have influenced the fraudulent scheme perpetrated.
Asset misappropriation and financial statements frauds find fertile ground in the weakness of internal control systems, while corruption schemes are most common in cases of poor tone at the top, where the management does not provide suitable code of conducts that clearly state what is permitted and what is forbidden.
To put the above in context, we provide below a case study, recently occurred in Italy:
Case study
A medium-size distribution company employing an account manager fully trusted by the management, with a high seniority and free access to all the corporate procedures. The fraud was perpetrated over more than 10 years and caused aggregate losses equal to approx. 23 million Euro, which caused the company to file for a bankruptcy procedure.
The account manager was also in charge of liaising with the key accounts of the company, overseeing payments of invoices and bank reconciliations. During the years, she embezzled the monies paid by the customers by altering the accounting records and the bank statements so to conceal the fraud from the audit company and the board of statutory auditors. The fraud, discovered by accident, covered a long time-span and the organization managed to recover only a small part of the losses suffered.
A greater segregation of duties within the organization and more accurate management reviews would have prevented/limited the fraud or at least reduced its duration.
The ACFE survey also shows that the presence of adequate control instruments may influence the size of losses and the duration of fraudulent schemes.
As shown in the chart above, proactive data monitoring/analysis along with surprise audits are efficient instruments to detect frauds and reduce their duration.
It is important to notice that according to the ACFE survey only 37% of victim organizations have implemented these controls.