Armanino Blog

Remaining Vigilant Against Financial Fraud in a Challenging Environment

by Patrick Chylinski
March 23, 2020

It is not unusual to see an uptick in financial fraud schemes during times of change and disruption. Given the recent turmoil caused by the outbreak of coronavirus (COVID-19), it's important that organizations remain vigilant.

Business leaders should monitor their current situation, adjust processes and procedures as appropriate, and communicate an awareness of potential fraud schemes throughout their organizations. These actions will be critical for helping identify, prevent and mitigate financial fraud schemes.

Financial fraud can take many forms, but the following list can help you protect your organization against potential risks:

  • Fraudulent disbursement schemes – During times when typical business practices are altered or disrupted, the risk of disbursement fraud may increase. Changes in purchasing levels or typical procurement processes can increase the likelihood that billing or expense reimbursement schemes occur without the proper oversight and monitoring. Don't take shortcuts around disbursement approvals – continue to exercise, or possibly increase your controls.
  • Insurance-related schemes – After natural disasters or other types of widespread business interruption, insurance-related fraud schemes may increase. Should you receive emails or other communication relating to insurance coverage or claims, be sure to use proper vetting, and conduct appropriate due diligence before sending information or making payments.
  • Donation-related schemes – You or your business may be targeted by nonexistent or fraudulent organizations seeking donations or financial contributions. Again, be sure to use proper vetting and conduct appropriate due diligence before sending information or donations. Make sure you review the organization's website and also consider using one of these organizations to help you research charities:BBB Wise Giving Alliance,Charity Navigator,CharityWatch, andGuideStar.
  • Risks from additional access – With the closure of offices and businesses, you may have made changes to your typical business processes and allowed employees, vendors, or other third parties access to locations and technology systems they might not have access to in normal situations. Be sure to review who should have access to your locations and systems and what level of access is appropriate, and ensure that proper monitoring of that access is in place.

Have questions or need assistance with risk assessment, processes or monitoring? Reach out to our CFO Advisory team. For the latest regulatory updates and resources to help you keep your business running through disruption, visit our COVID-19 Resource Center.

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