Page 132 - Finanancial Management_2022

LEARNING RESOURCES

Resource
Fraud Risk Management Guide A New Solution for Managing Supply
Chain Risk
This guide provides implementation guidance that defines principles
and points of focus for fraud risk management and describes how Learn about SOC for supply chain.
organisations of various sizes and types can establish their own fraud
risk management programme.
PUBLICATION
others carrying out VACCP exercises can
MBAexpress: Ferreting Out Fraud access these databases to find out about
different types of fraud and the risks
Prepare to ferret out fraud by learning about the fraud triangle, fraud involved that might lead to physical
risk factors, warning signs of fraud, and the steps you can take to harm.
prevent it.
A strong argument can also be made
COURSE that companies need to get the basics of
anti-fraud right, such as zero tolerance
policies, safe whistle-blowing
mechanisms, designated fraud officers,
and procedures for dealing with
maintain Hazard Analysis and Critical database to produce the VACCP reports suspected incidents.
Control Point (HACCP) plans for food needed for certification. Alongside
safety. robust due-diligence checks any What tools are needed, and can
Recently, the HACCP model has been company may conduct on suppliers, the artificial intelligence help?
adapted to identify vulnerability to fraud VACCP plans provide the main risk Food fraud risk assessment exists but can
risk. Several industry certifications now assessment measures for food fraud. be hampered by either a lack of
require food companies to have Food companies are also called on to knowledge of food and food supply
Vulnerability Analysis and Critical demonstrate the traceability of their chains, or by a lack of knowledge of how
Control Point (VACCP) plans to measure products from “farm to fork” for fraudsters operate or how legitimate
food fraud risk. They are typically large consumers and certification purposes. organisations can gradually turn to
spreadsheets, one row per ingredient, Random audits of traceability, called illegitimate activities for survival or profit.
and provide a heat map or traffic light traceability challenges, are carried out on Several companies are working on
visualisation of key risk factors, such as the paperwork. Emerging technologies enhanced software and databases that
loss of supply through disease, weather, such blockchain or other distributed will use artificial intelligence in building
or conflict events. They can be huge, ledgers are being put forward as better the database of incidents and
given that even a midsize enterprise ways to maintain the audit trail that ingredients, and they are using machine
might have hundreds or thousands of demonstrates the authenticity of learning to classify the risks.
ingredients. products. The risk remains that the food With an estimated loss to the food and
Several software and cloud-based itself could be substituted or diverted beverage industries from all types of fraud
application companies now offer digital despite robust audit trails and of about £12 billion per year in the UK
ways to enter the information into a blockchain. alone, not to mention the risk that one
Other emerging technology includes incident might bring an end to the
the use of big data methods to identify business, finding best practice in assessing
potential risks from world events or risk and finding mitigations in food fraud
market changes, the main one being could also help protect against all frauds in
horizon scanning. This method identifies the food and drink industry. ■
weather, disease, legal, and conflict
events that might affect food supply. For
example, low supply may constitute a
fraud risk that can be included in Lisa Jack, Ph.D., is a professor of
VACCP plans. Also, fraud risk accounting at the University of
assessors can consult databases Portsmouth in the UK. She
run by the UK, EU, and US specialises in the effects of
governments and private accounting and performance
agencies that list reported and measurement practices on the
identified incidents, such as agri-food industry. To comment on
Decernis, Rapid Alert System this article or to suggest an idea
for Food and Feed (RASFF), Food for another article, email
Authenticity Network, and US fm-magazine@aicpa-cima.com.
Pharmacopeia. Quality teams and

14 I FM MA G AZINE I A ugus t 2022
14 I FM MAGAZINE I August 2022