ComplianceOnline PPT Format 2015 Developing an Effective Fraud Risk Management Program 4.9.2015

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© 2015 ComplianceOnline
This training session is sponsored by
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Developing an Effective Fraud Risk
Management Program
This Training is Brought to you by ComplianceOnline.
Presenter: Craig M. Taggart

www.complianceonline.com
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 Areas Covered in the Webinar:
 Identify fraud risks and the factors that influence them
 Analyze existing risk management frameworks and
their application to managing fraud risk
 Develop and implement the necessary components of
a successful fraud risk management program
 Identify the elements of a strong ethical corporate
culture
 Conduct a cost effective fraud risk assessment
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Agenda
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The risk of fraud is just one of the many types of
risks to be managed by an organization. But to let
this risk fall out of focus can bring catastrophic
results. Building an effective fraud risk
management program to combat organizational
fraud requires solid understanding of how and why
fraud is perpetrated. This course will discuss the
components of a fraudulent act, different types of
fraud schemes and the impact fraud has on
organizations. It will also analyze why individuals
commit fraud and why the threat of punishment
alone doesn’t deter potential fraudsters

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 Definition of Fraud source Wikipedia
 In law, fraud is deliberate deception to secure unfair or
unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim
may sue the fraud perpetrator to avoid the fraud and/or
recover monetary compensation) and a criminal wrong (i.e., a
fraud perpetrator may be prosecuted and imprisoned by
governmental authorities). The purpose of fraud may be
monetary gain or other benefits, such as obtaining a drivers
license by way of false statements. A hoax is a distinct concept
that involves deception without the intention of gain or of
materially damaging or depriving the victim.
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 Instructor Profile:
 Craig Taggart has almost a decade of experience in the fields of mergers and acquisitions and
business financing. Mr. Taggart works strategically with his clients to achieve the highest value
for their business within the capital markets. His experience with BCC Capital Partners in the
M&A industry has greatly contributed to his understanding of transaction structure, strategic
 placement of buyers, and the attainment of maximum market value for his clients. He has
represented and sold many businesses in a number of different industries and has significant
experience working with companies in: continuing education, transportation, software and
professional services. Mr. Taggart is currently working in the clean energy sector that covers
multiple initiatives within M&A and corporate development.
 He is a certified merger and acquisition advisor, accredited valuation analyst as well as an active
member of Alliance of Mergers and Acquisition, and The National Association of Certified
Valuators and Analysts (NACVA). Mr. Taggart has been a certified fraud examiner since 2011
and has owned an investigative franchise business, which focused on fraud based cases
involving insurance, asset searches, surveillance, witness statements
 He earned his MBA from the San Diego State University specializing in financial management.
Mr. Taggart graduated from the California State University Northridge with a bachelor’s degree
majoring in organizational psychology.

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Agenda
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Why Should You Attend:
The field of risk management has attracted
increased mainstream attention in the wake of
the economic meltdown as the public has
begun to comprehend the negative effects of
uncontained risk. Unfortunately, many risk
management professionals tend to
underestimate the role of fraud in the scope of
their professional duties.

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 With organizations losing an estimated 5 percent of
their annual revenues to fraud, the need for a strong
anti-fraud stance and proactive, comprehensive
approach to combating fraud is clear. As organizations
increase their focus on fraud, they should take the
opportunity to consider, enact and improve measures
to detect, deter and prevent fraud. Without clear,
defined objectives, a fraud risk management program
cannot be effective.
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 Common Fraud Schemes source FBI
 Telemarketing Fraud
 Identity Theft
 Advance Fee Schemes
 Health Care Fraud / Health Insurance Fraud
 Redemption / Strawman / bond Fraud
 Nigerian Letter or “419” Fraud
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 Whether in your individual role or in a team setting,
you are taking on a process of determining current or
future acts of fraud. The process at a larger
organizational level or within a function, the fraud
assessment process is basically the same. Here is the
top down approach:
 Review Business Objectives
 Review current assessed fraud & fraud categories
 Review core processes tied to the objectives
 Brainstorm fraud that can affect your organization
The Fraud Assessment Process
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 Determine criteria or (possibility and impact) to
develop ranking acts of fraud into critical, important
and not important as it pertains to specific
organization
 Determine whether the controls in place are efficient
and effective
 Action plans and more testing where needed
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 Corruption, embezzlement, fraud, these are all
characteristics which exist everywhere. It is regrettably
the way human nature functions, whether we like it or
not. What successful economies do is keep it to a
minimum. No one has ever eliminated any of that
stuff.
 Alan Greenspan former Chairman of the Federal
Reserve of the United States from 1987 to 2006
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 In this course, participants will:
 Learn how to set program objectives and define risk
appetite as the first step in building the program.
 Discuss the steps involved in developing a fraud risk
management program, as well as the program
components necessary to fully manage the risk of
fraud.
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 Review risk management frameworks and will be
introduced to the concept of fraud risk, including the
factors that influence it.
 Learn why businesses should manage fraud risk and
who within the organization is responsible for this
task.
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 Learning Objectives:
 Identify, assess and manage fraud risks from all
sources and support fraud risk management initiatives
by establishing an anti-fraud culture and promoting
fraud awareness throughout the organization.
 Be able to develop a system of internal controls to
address the entity’s fraud risks and address and
respond to any identified instances of fraud.
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 Becoming familiar with common fraud schemes and
risks
 Identify fraud scenarios and schemes that threaten the
organization
 Identify red flags and encourage ethical corporate
culture
 Building a strong anti-fraud policy
 Promote fraud awareness to employees at all levels of
the organization
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 Who Will Benefit:
 Bank and financial institution auditors
 Controllers and corporate managers
 Forensic and management accountants, accounts
payable and financial analysts
 Governance, risk management and compliance officers
 Internal and external auditors, CPAs and CAs
 Certified fraud examiners and other anti-fraud
professionals
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 Techniques used for fraud detection fall into two primary
classes: statistical techniques and artificial intelligence.[3]
Examples of statistical data analysis techniques are:
 Data preprocessing techniques for detection, validation, error
correction, and filling up of missing or incorrect data.
 Calculation of various statistical parameters such as averages,
quantiles, performance metrics, probability distributions, and so
on. For example, the averages may include average length of
call, average number of calls per month and average delays in bill
payment.
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 Models and probability distributions of various business
activities either in terms of various parameters or probability
distributions.
 Computing user profiles.
 Time-series analysis of time-dependent data.
 Clustering and classification to find patterns and associations
among groups of data.
 Matching algorithms to detect anomalies in the behavior of
transactions or users as compared to previously known models
and profiles. Techniques are also needed to eliminate false
alarms, estimate risks, and predict future of current transactions
or users.
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THANK YOU FOR YOUR ATTENTION
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ComplianceOnline PPT Format 2015 Developing an Effective Fraud Risk Management Program 4.9.2015

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