Joined-up fraud detection – external audit and internal resources

Veronica Morino(veronica.morino@hibis.com) has worked on detection, prevention and investigation of international fraud and corruption for almost 20 years. Convinced, by experience, that raising awareness and focusing on prevention is far more cost-effective than investigation, she specialises in strengthening corporate defences against fraud and corruption.Martina Marmai(martina.marmai@hibis.com) is committed to tackling corruption and fraud as major obstacles to sustainability and growth; she specializes in identifying corruption red flags through internal and external analysis, and investigating them across a wide range of countries and language zones.

Before anything else, we want to make clear, write Veronica Morino and Martina Marmai of Hibis, that this is not another article that puts the blame on external auditors for not spotting the warning signs of fraud, corruption or other malpractice. The purpose, rather, is twofold: first, we will offer some thoughts on how management of fraud risk can be improved in response to better, more useful feedback from external auditors; second, we aim to show that information already available internally can (and should) also be used in early detection, and demonstrate its importance both for reviews conducted by external auditors and management decision-making.