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Fraud Examiner & Forensic Specialist.
Mustapha B. Mugisa, CFE, CEH
Examining the challengesof Managing the Fraud
problem in Africa
How to cope with the
continuing and emergingfraud scams.
Forensic. Advisory. Fraud
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Forensic. Advisory. Fraud
How much money do youestimate Africa loses
annually to fraud?
In which ways is it lost?
Im
agecredit,
AC
FE.com
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Research
Forensic. Advisory. Fraud
An averageorganization losesabout 5% of its
annual revenue tofraud,ACFE Report
to The Nations 2012.
Africa 2011 GDP in US $
1,880 million
94 million!ACFE Uganda survey in2011 revealed banks &
telecoms lose 15-25% of
annual revenue to fraud!
The cost of fraud to Africa
Thats a combined GDPof 25 African countries
at the bottom!
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4
Fraud
Fraud by false
representation
Abuse of
positionof trust
The act is
intentional
Causesloss to the
entity &
gain to the
fraudster.
In any organisation,
small proportion of
staff act dishonestly
Forensic. Advisory. Fraud
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Common fraud schemes
Bid
Rigging
Fraudulent
Academic
Credentials
Kick
backs
Fraudulent
Reports
AssetMisappropriations
Corruption Conflict of interest
Bribery
Purchaseschemes
Improper
disclosures
Expense
reimbursements
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(i) bribery,
(ii) extortion and(iii) conflict of interest.
6
Common corruptionschemes...
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How Occupational Fraud is Committed
2012 Association of Certified Fraud Examiners, Inc. 7
Occupational Frauds by Category Frequency
Source: ACFE.com
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2012 Association of Certified Fraud Examiners, Inc.
Asset misappropriationschemes, in which an
employee steals or misusesthe organizations resources
(e.g., theft of companycash, false billing schemes
or inflated expense reports)is the most common.
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The burden to Uganda due to high fraud
9 Forensic. Advisory. Fraud
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Why fraud is a
growing problem inAfrica?
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Top fourchallenges
12
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#1: Weak support
13
Small budget toanti-fraud
efforts
Lack of rightskills and tools
Culprits are
usually highlyconnected
Cases l ike this
wou ld go free!
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#2: Conflict of interest
14
Double life of corporate officers
Some public
Servants operatetwo different lives
the
private/public
sector challenge
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#3: Top at the top
15
A complicatedscenariomeri t vs . ski l l!
Law of thejungle rules Power corrupts.
absolute power
corrupts
absolutely.
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#4: Absence of correct data
16
Fraud by itsnature isclandestine i.e.hidden
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Forensic. Advisory. Fraud
Insight
What are the values ofGovernment?
How do the PublicServants live by em?
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Seven elements of fraud
Code ofethicsFraud
PreventionPolicies
Communication& Training
Fraud RiskAssessment
Monitoring Response plan
Ownership
Forensic. Advisory. Fraud
prevention
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EthicsWould you tolerate liars?
Is your integrity for sale?
Code ofEthics(Honest)
Forensic. Advisory. Fraud
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Title of your presentation
EthicsAre you ethical?
Unethical behavior
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People
Forensic. Advisory. Fraud
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Fraud policiesCan you state your anti-fraud policiessimply? Do
they provide for fraud
reporting and anonymouswhistleblowing?
Policies(Entity specific)
Forensic. Advisory. Fraud
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Tipping tops all...
23
Method EffectivenessTip/ whistleblowing system 40.2%
Management review 15.4%Internal audit 13.9%
By accident 8.3%
Account reconciliation 6.1%
Document examination 5.2%
Forensic. Advisory. Fraud
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Forensic. Advisory. Fraud
Insight
Why does fraud andcorruption continue despite
good laws in Africa?
Any ideas?
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Your DecisionWhat is your personal ethical credo?
Forensic. Advisory. Fraud
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Q&AThanks for your time
Mustapha Mugisa, CFE, CEH, CISA, MBA, CPA, CrFA
Forensic specialist & fraud examiner
0712984585, [email protected]
Title of your presentation
Forensic. Advisory. Fraud
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Summit ConsultingForensic. Advisory. Fraud
www.summitcl.com
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We have beenconsistently ranked byour clients as the best
in our areas.
We specialize in digital forensics, IT security,risk management
and fraud prevention.
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Our whistleblowerreporting system is
secure & anonymous.
https://www.scethicsline.com or email or phone.
Available 24/7. English. Luganda and Swahili.
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Are you getting the
right forensic, ITsecurity and anti-
fraud training?
www.iifft.org for all your trainingand certification needs.
