Procure-to-Pay Fraud: Detecting and Preventing Purchasing, Receiving and Disbursement Frauds
For many organizations, the procure-to-pay (P2P) cycle offers extensive opportunity for increased operational efficiency. By coordinating the processes of procurement, shipping/receiving and accounts payable, substantial time savings and paperwork reduction can result.
However, the P2P cycle also provides potentially numerous opportunities for fraudsters to exploit control deficiencies in all three stages. Fraud risks in P2P exist both in the internal environment as well as among dishonest vendors and other deceptive outsiders.
One common management mistake in the P2P cycle is adhering to a reactive anti-fraud posture. A criminal act committed in, for example, the purchasing department through a kickback scheme, may be detected and dealt with on an “emergency” basis. Meanwhile, equally, if not more costly frauds may be going unnoticed in the receiving and account payable areas. Anti-fraud experts urge a proactive, comprehensive P2P anti-fraud approach. It should be include assessing fraud risks in all three phases ... conducting regular audits that comprise testing for these risks and ... following up with effective internal control design and monitoring.
Fraud against organizations is growing every year, according to the respected international fraud investigation firm, Kroll. The majority of all fraud, according to the Association of Certified Fraud Examiners is committed by employees.And—because most of the funds flowing out of the organization do so through the procure-to-pay cycle, it stands to reason that much of the growing fraud threat is centered on these critical closely-linked business functions. This underscores the urgent need for management to understand the vast variety of frauds in P2P and to apply the necessary detection, audit, reporting and prevention measures.
- Understand how the most common procurement, receiving and disbursement fraud are perpetrated, including the latest technology-driven crimes that are costing organizations millions of dollars
- Understand why purchasing, receiving and accounts payable employees commit fraud
- Recognize the all-important red flags of common P2P frauds
- Develop a knowledge base of P2P fraud detection tools and techniques
- Begin creating a framework of effective anti-fraud controls
- Internal and external audit professionals
- Accounting and audit practitioners
- AP managers
- Senior financial management seeking to reduce their vulnerability to costly frauds
- Procurement and payables specialists
- Compliance and ethics managers
- CFO’s/senior financial managers
No advance preparation required
Level of Knowledge
Group Internet Based
NASBA Field of Study