The Weakest Link: Understanding & Detecting Supply-Chain Fraud

Supply-chain fraud can affect every level of an organization. Learn how an inventory transfer approach can detect this rampant, inter-departmental fraud and how the traditional role of fraud examiners must shift to keep up with technology.

Jenna was a trusted sales representative at XYZ Shipping Inc. Her supervisor no longer checked on Jenna’s daily activities because of her profitable track record in the sales department. With no one watching over her shoulder, Jenna soon started selling her company’s merchandise and pocketing the profits herself. When Kerry, a CFE, was hired to do an internal review for XYZ at the end of the year, she implemented an inventory transfer approach for the entire company. It was through this approach that Kerry detected that Jenna was pilfering goods and looting money from XYZ Shipping. This article will explain supply chain fraud and how fraud examiners can prevent and detect it, just like Kerry did for XYZ.

Unlike many CFEs, I don’t have a financial – accounting or auditing – background. I “grew up” as a business applications programmer, trained to use technology to solve business operations problems my clients were struggling with – from the simple, “Can the information on the report be sorted in date order?” to the complex, “Can re-engineering operating procedures with technology improve our business?”