Fraud is a serious on-going problem affecting the manufacturing industry. Recognizing where manufacturing businesses may be at risk for possible fraudulent activity is a crucial part of the risk management process.
A lack of management understanding of the risks or support for automated systems, processes, and internal controls over procedures and protocols, puts manufacturers at a higher risk to individuals who are willing to commit fraudulent activities, waste valuable resources, and abuse their authority. An increased risk for loss of costly inventory, unauthorized transactions, altered financial or inventory records, can all result in detrimental consequences to their businesses.
This solution sheet, Decoding Fraud for Manufacturers and Indicators for Mitigating Risk, outlines how manufacturing leaders can be proactive in detecting and preventing fraudulent activities by:
- Understanding what constitutes as fraud
- Recognizing how fraud impacts manufacturers
- Detecting the red flags or indicators that point to fraud