{"id":46840,"date":"2022-10-04T11:44:02","date_gmt":"2022-10-04T11:44:02","guid":{"rendered":"https:\/\/compliancenow.eu\/?p=46840"},"modified":"2023-05-19T06:40:18","modified_gmt":"2023-05-19T06:40:18","slug":"risk-prevention-sap","status":"publish","type":"post","link":"https:\/\/compliancenow.eu\/en\/blog\/risk-prevention-sap\/","title":{"rendered":"Risk prevention in SAP and why this is something you should focus on"},"content":{"rendered":"

As a company that works with risk management and compliance operations, we know that it is often difficult to really argue why you should focus on risk prevention, especially as it is often intangible. Furthermore, it can be difficult for employees to approach their leadership to explain why they should invest in risk management tools. Because while risk management tools ideally should result in preventing malicious things from happening, it also means that a good and well-functioning risk management tool <\/span>actually ends<\/span> up being less visible in the organization. In other terms, it does a lot of important work without showing off, meaning that it often does not get the credit that it <\/span>warrants<\/span>.<\/span><\/span>
<\/span><\/p>\n

Does this mean that it is completely intangible? Absolutely not. <\/span><\/span><\/strong>At <\/span>ComplianceNow<\/span> we have always looked at good risk management tools and processes as a form of insurance \u2013 meaning that they are necessary to have but difficult to place a value on. However, let\u2019s take some evidence and statistics from different fraud cases, and maybe this can help contextualize what you are trying to prevent with SAP risk management tools<\/span> and place a tangible value on the tools. <\/span><\/span><\/p>\n\n\n

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Statistical background<\/h2>\n

The ACFE compiled an interesting report in 2020<\/a> wherein they presented a study based on 2504 fraud cases. They found that these cases alone represented a loss of 3.6 billion USD, and <\/span><\/span>it is estimated that more than 4.5 trillion USD is lost to fraud each year<\/span><\/span><\/strong> \u2013 in percentages that translate to organizations los<\/span>ing<\/span> an estimated 5% of revenue to fraud each year on average. The same statistic tells us that this equals an average loss of 1.5 million USD per fraud case. In the investigated cases, this was the average loss, <\/span>while the<\/span> median loss was 125.000 USD. <\/span>T<\/span>his is certainly something that most companies would like to avoid. <\/span>However<\/span>, the most <\/span>interesting part in relation to SAP risk management processes lies in the types of fraud and how fraud is usually discovered (or not discovered)<\/span><\/span> <\/span><\/p>\n<\/div>\n\n\n\n

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<\/div>\n\n\n\n
\"risk<\/a><\/figure>\n<\/div>\n<\/div>\n\n\n

Asset misappropriation is the most frequent type of fraud and represents 86% of occupational fraud cases<\/span><\/span><\/strong>            \u2013 ranging<\/span> from skimming to billing fraud. Especially risky asset misappropriation is check <\/span>and<\/span> payment tampering<\/span> and billing fraud. Furthermore, the perpetrators attempt to conceal the fraud by<\/span> altering<\/span> electronic documents<\/span> (27 % of the cases)<\/span> or by creating fraudulent electronic documents<\/span> (26 % of the cases)<\/span>. In other words, something that could be prevented with <\/span>segregation of duties<\/span> and internal controls \u2013 or at the very least could be easily tracked and discovered.<\/span><\/span>  <\/p>\n

It is additionally very <\/span>interesting,<\/span> that most fraud cases are discovered by leadership being tipped, and very little is discovered by internal controls due to a lack of implemented internal controls<\/span> in the organization<\/span>. <\/span><\/span>A lack of internal controls contributed to nearly <\/span>1 out of every 3<\/span> fraud cases!<\/span><\/span><\/p>\n

Our beliefs and values<\/h2>\n

We in <\/span>ComplianceNow<\/span> believe that having good and efficient risk management processes start<\/span>s<\/span> by having the right tools. Tools are necessary, as business landscapes are more and more complex<\/span><\/span>. You simply cannot have a compliant, <\/strong><\/span>risk free<\/span> and transparent organization without<\/span> the right tools<\/span>.<\/span><\/strong><\/span> As this blog has documented, having segregation of duties and internal controls are a very necessary part to prevent fraud and staying compliant. <\/span>Remember that <\/span>segregation of duties<\/span> tools and internal control are not limited to only help with fraud cases<\/span>, but as demonstrated, if we only look at fraud, these tools already have a great business case in most organizations.<\/span> In addition to preventing fraud, the tools also help you with reducing costly human error, general overview of documentation, paper trails for auditing and more effective and less costly auditing processes. In fact, <\/span><\/span>all major auditing houses recommend implementing a<\/span> segregation of duties<\/span> tool<\/span> in your organization.<\/span><\/span><\/strong><\/p>\n

If you are interested in hearing more about CN: Access Control<\/a> or CN: Internal Control<\/a>, then contact us for a free 1-hour demo<\/p>\n\n\n

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Follow us on LinkedIn<\/a><\/strong> and get instant access to our latest articles and posts on SAP and compliance.<\/p>\n\n\n

\"Segregation<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

As a company that works with risk management and compliance operations, we know that it is often difficult to really argue why you should focus on risk prevention, especially as it is often intangible. Furthermore, it can be difficult for employees to approach their leadership to explain why they should invest in risk management tools. […]<\/p>\n","protected":false},"author":31,"featured_media":47559,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-46840","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"yoast_head":"\nRisk prevention in SAP – why this is something you should focus on<\/title>\n<meta name=\"description\" content=\"Risk prevention in SAP starts with having the right tools. 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