An Introduction to Supply Chain Fraud


Few terms resonate so deeply with business these days as do “supply chain” and “fraud”. Individually, these two terms are a reflection of the evolving business world around us: the supply chain is truly global in nature, and it seems that fraud is being committed in both the public and private sector at alarming rates and dollar amounts, with more clever and audacious schemes being hatched on a regular basis.

Together though, the term “supply chain fraud” encompasses a growing (and possibly silent?) threat that strikes both wide and deep at an organization’s operations along the internal and external supply chain. The ramifications of fraud early in the supply chain may have significant impacts later on in the supply chain; yet to the untrained observer, the two instances of fraud may seem unrelated. Worse, the solution to reduce fraud may not cover all areas where fraud has occurred or the effects of fraud felt.

For turnaround professionals, auditors, fraud examiners and the like, as well as executive management and all levels of employee, understanding the depth and breadth of supply chain fraud is indeed crucial to helping ensure healthy organizations stay healthy, and helping distressed organizations become healthy again.

This white paper will provide the reader a comprehensive overview of what supply chain fraud encompasses, who the likely perpetrators are, where it is likely to be found, and what can be done to detect and reduce it, along with the relationship to Sarbanes-Oxley compliance, and with useful definitions of the “supply chain” and of “fraud”.

Other articles in this series:

Understanding and Attacking Supply Chain Fraud

Supply Chain Fraud and Sarbanes-Oxley

COSO – Sarbanes-Oxley and Supply Chain Fraud

Definition of Supply Chain

Definition of Fraud

Who’s Involved in Supply Chain Fraud?

What Are the Causes of Supply Chain Fraud?

Where Does Supply Chain Fraud Happen?

Assessing the Impacts of Supply Chain Fraud

Methods of Detecting Supply Chain Fraud

Dreaded Shrinkage: Bottomless Pit or Grave?

Importance of Internal Assessments Before SOX Audits

Budgeting For the Repercussions of Supply Chain Fraud

Summarizing Challenges Surrounding Supply Chain Fraud

Guest Author: Norman Katz

Copyright © Katzscan, Inc. – Source: Supply Chain Fraud White Paper

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