Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Michael Greene
May 19 — A recent Deloitte Financial Advisory Services poll indicates that many companies may not be adequately prepared to address supply chain fraud.
In an online survey of more than 2,000 professionals, more than a quarter of the respondents (28.9 percent) said their company has experienced fraud, waste or abuse in its supply chain during the past 12 months. A similar percentage (26.7 percent) also said their company did not have a program in place to prevent this type of fraud and abuse.
Larry Kivett, a partner at Deloitte Financial Advisory Services LLP, told Bloomberg BNA May 19 that these results raise questions from a compliance perspective about whether enough is being done in this area. Kivett noted that it is not uncommon for organizations to identify instances of fraud occurring within their supply chains, so to him, the percentage of respondents indicating that fraud had occurred “seemed a bit low.”
If companies don't have a program in place to determine whether fraud is occurring, it may not be actually identifying instances of fraud, he explained. “A gap we see pretty frequently is that a company isn't necessarily stepping back and looking at their risks of fraud and types of fraud schemes that can be occurring within the supply chain.”
“This speaks to the importance of having a program in place to be able to address these types of issues,” he said.
On another topic, a majority of poll respondents said their companies perform due diligence on vendors and business partners, with 29.6 percent conducting it on all third parties and another 35.7 percent conducting it on at least some third parties.
“It seems there are a lot of companies that place a great amount of reliance on that front-end process,” Kivett told BBNA.
However, once a third party has been vetted and made its way through the due diligence process, it becomes less clear how frequently the due diligence gets updated, Kivett said. Companies must ensure they have “processes in place to continue monitoring risky third parties.”
To contact the reporter on this story: Michael Greene in Washington at email@example.com
To contact the editor responsible for this story: Ryan Tuck at firstname.lastname@example.org
The survey results are available at http://op.bna.com/car.nsf/r?Open=mgre-9wnrwc.
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)