Auditing Unethical & Fraudulent Practices in Procurement

Duration: 3 Days

Overview

Outline

The course is structured around, and focused on, understanding how to detect and prevent unethical practices in procurement. It is aimed at the internal auditing teams or anyone in a similar function.

Each module is underpinned by workshop-based, real-world case studies. The overall approach is geared towards facilitating and divulging information and skills relevant to the practical needs of the attendees, and includes the following topics:

 

  • Learn about the fundamental concepts that underpin the audit and management of the procurement process

  • Identify common fraud related practices

  • Understand how to spot unethical dealings

  • Evaluate and implement strong internal controls

  • Adopt a robust tendering and bidding process

  • Instill the right management practices and process for transparency and accountability

Overview of the Purchasing Cycle

  • Discuss the responsibilities of a typical corporate purchasing group and the purchasing business cycle

  • Understand who is involved (internal and external)

  • Identify differences in the purchasing cycle depending on the industry and company size

Purchasing Fraud Schemes

  • Classifications of purchasing fraud

  • Corruption

  • Asset Misappropriation

  • On and off book

  • Purchasing fraud schemes

  • Purchasing fraud statistics and industry comparisons

Risk-based Strategy to Fight Purchasing Malpractice

  • Purchasing fraud risk assessment

  • Fraud opportunity reduction through purchasing process improvement

  • Internal controls to reduce purchasing fraud risk

  • Proactive risk-based auditing to detect purchasing fraud

  • Investigations of purchasing frauds identified

Use of Internal Controls in Purchasing

  • Assess the level of purchasing fraud risk at your organization, including industry and geographic considerations

  • Define relevant internal control practices (e.g. explicit policies, segregations of duties, vendor selection, and independent centralized procurement group)

  • Review policies, processes, and approval limits

  • Exceptions to normal protocol (e.g. sole sourcing decisions and bid waivers)

  • Vendor monitoring and evaluation criteria

Fraud Detection Processes

  • Risk-based purchasing fraud detection audits

  • Using CAATS to detect purchasing fraud

  • Tips and complaints

  • Soliciting feedback from management, employees, the public and vendors (current, former and rejected)

  • Vendor monitoring

  • Monitoring of major contracts

Detecting Particular Purchasing Fraud Schemes

  • Scheme-based purchasing fraud symptoms and detection methods

  • • Special considerations for off-book purchasing fraud schemes

  • • Special considerations for contract bidding schemes