Monthly Newsletter

December 2018

Welcome to the last Exactech Anti-Fraud Newsletter for 2018!

The Festive Season has arrived and so we wish all our
readers a Merry Christmas and hope you will have a
most enjoyable holiday!
Please remember that the criminals are very active
during this time. They know many employees are on
leave and businesses have skeleton staff on duty,
thereby making their victims easy targets.
In addition, they realise that people on holiday are
more relaxed with their belongings, also making
themselves soft targets.
We know of many incidents this year where criminals
remote jammed cars in the Kruger National Park,
stole expensive photo gear from either the chalet or
vehicle and even robbed one of the park gates.
These types of incidents also occurred in other
reserves, so it’s not just the Kruger Park where you
need to be vigilant.
So, whether you are working through the Festive Season or are travelling on
holiday, ‘Be Fraud Alert’ as the logo from the Dorset Police cautions us.
QUOTE OF THE MONTH
"Trust, but verify”
- former U.S. President,
Ronald Reagan
TIP OF THE MONTH
‘Trust’ is not a control. Rita ‘the
Queen’ Crundwell was so trusted,
that instead of hiring a treasurer,
the City of Dixon asked her to
perform that function in addition
to her financial comptroller role.
They saved on a 2nd salary but lost
$53 million! A separate treasurer
would have ensured that Rita’s
payments were verified.

BEC (Business Email Compromise) Fraud

The FBI has estimated that global losses resulting from BEC fraud are around $12.5 Billion! BEC, also called CEO fraud, is a
scam targeting both businesses and individuals performing EFT payments. The fraudsters send an email to the relevant
person in finance, purporting to be from the CEO, requesting funds to be transferred.
In many cases the email is from a Gmail account, or the How can these scams be Prevented?
email looks correct but when you click ‘reply’ you see
that you are not replying to the visible email but another Two-step verification procedure. If the junior employee/CFO
email address. Even so, the targeted people in finance called the CEO or Head Office to confirm the EFT request it
tend to follow the instructions and transfer the monies. would have been discovered to be fraudulent.
Why is the scam so successful you may ask? Employee education. The scam also might have been
In many organisations the culture is one of ‘don’t ask prevented if the finance employees knew enough about BEC
questions, just obey’ so the targeted employee is too scams to be suspicious of the request.
scared to question the email.
In some cases, the fraudsters time it so that the email Do your employees know about BEC frauds and the many
arrives while the CEO is away and cannot be contacted. other current scams?

Editor: Mario Fazekas Mobile: +27 (0)83 611 0161 Office: +27 (0)11 475 2525
www.exactech.co Email: mario.fazekas@exactech.co
The IIA SA 2018 Corporate Governance Index shows a worrying decline in sentiment in the Ethics Dimension.
Chief Audit Executives were asked to give their opinion on the state of governance in their organisations.
Only 48% strongly agreed that ethics is an important part of their organisation's culture.
As Claudelle says in the report, “Setting the tone and walking the talk is simply not enough. Leaders must
ensure that appropriate interventions are in place as well as measuring tools with regular reports on progress
flowing to the top. Ethics should not be an occasional ad hoc conversation that only surfaces in response to
what is reported in the media. An ethical culture is core to long-terms sustainability, which in turn is core to
the leaders’ fiduciary duty.”

The report also showed that only 41% of respondents

strongly agreed that their leadership display a good
understanding of the varying roles of assurance
providers while only 35% strongly agreed that they
have adequate resources to enable them to execute
their duties effectively.
There is a saying; "A prophet is not without honor
except in his own town and in his own home." People
tend to believe strangers before they believe those
closest to them, so try and get us before your board
where we can start a dialogue to try and convince the
executives that fraud prevention and good ethics are
good business

International Fraud Awareness Week: 11-17 November 2018

What did you do for Fraud Awareness Week?
We had a very busy week presenting at clients, with two highlights: Antonio was part of a fraud panel
discussion with Mayor, Herman Mashaba, at the City of Johannesburg while Mario delivered a fraud
presentation to all the staff members of MTN Swaziland, including a separate Executive session.
Remember, Fraud Awareness doesn’t stop in November – you need to keep the momentum going
throughout the year with other initiatives such as posters, desk-drops, fraud articles, short presentations,
ethical dilemmas, follow-up awareness sessions, newsletters, etc.

City of Johannesburg MTN Swaziland

Ethics & the Internal Fraud Prevention

EXACTECH FORENSICS KingPhone:
IV on (555)
Fraud555-5555
& Ethics
Auditor & Detection 14 Dec 2018 (JHB)
123 Fake
06-07 Street,
Dec City, ST 12345 10-13 Dec 2018 (JHB)
2018 (JHB) Fax: (555) 555-0000