Management review and dual authorization of transactions is also critical. “If you think of a transaction as a circle, no one should be able to complete the entire circle by themself” because it would allow for concealment, she said.
Assessing potential conflicts of interest and relationships between people along the transaction circle is also important. Recently, the attorneys representing a large estate called in Todd to help with a situation where collusion occurred. The estate’s trustee—an attorney and the spouse of a money manager at the institution where the estate was being managed—stole millions of dollars because the spouse approved the transactions.
Finally, companies that have whistleblower hotlines or some mechanism to turn in tips typically have fewer, shorter and less costly frauds, said Todd, who noted that most frauds are detected by tips and that hotlines are often anonymous. “The employee is more likely to turn in a tip if they feel like they can trust the process, understand the process and know that they’re going to be anonymous,” she said.