Supply chain disruptions have become commonplace for everything from groceries to automobiles to building materials. As a result of these issues, it has become more difficult and costly to obtain certain products. Supply chain problems have affected every individual and industry in some way.
In these difficult and expensive times, people may be more likely to get creative with how they source products, parts, and materials. Supply chain fraud includes bribery, misrepresentation of goods, financial fraud, violation of sanctions and bid rigging.
Businesses can do the following to mitigate these fraud risks:
- Conduct risk-based due diligence to ensure that distributors, business partners, and agents are held to a high standard of conduct.
- Examine the business hierarchy and procedures to gain approvals.
- Develop and enhance fraud and corruption controls through risk assessments, including accounting controls, training, policies, and procedures.
- Test transactions and controls using independent and objective sources familiar with the business, industry, culture, practice, and regulations.
- Conduct, re-evaluate and refresh fraud and corruption risk assessments regularly to ensure the systems are continuously updated and reinforced.
To keep fraud at bay, organizations must continuously examine and enhance risk management systems to ensure they are well-positioned to prevent, detect, and, if needed, fight fraud.
Maintaining the order of business and its supply chain is the best way to ensure they continue to thrive, and the company continues to succeed in serving others.