What Do You Say After Uncovering $7.4 Billion in Fraudulent Transactions?
March 21, 2019
Imagine working as an auditor at PwC conducting an investigation into accounting irregularities when you uncover $7.4 billion in fraudulent transactions. What would your initial reaction be when the amount of fraud started to add up? “Houston, we have a problem!” Except this happened in South Africa in what is being called the largest corporate scandal in the country.
Steinhoff International is a global retailer with more than 40 brands in over 30 countries. Visit the company’s web site now and you’ll be greeted with numerous details about the investigation on the home page. According to the forensic investigation document, PwC was brought on board to analyze and investigate allegations of potential accounting irregularities and/or potential non-compliance with laws and regulations, made against various Steinhoff entities and its former executives.
According to the report by PwC, the company recorded irregular or fraudulent transactions of $7.4 billion by former executives and external parties. These transactions were used to inflate profits and asset values of the company. And in order to cover up this illegal activity, the executives allegedly backdated documents.
Several top executives have resigned upon these revelations and shareholder value has dropped. In fact, additional reports stated that the company posted a $12 billion valuation write-down last year.
Now imagine if as a CFO, Controller or Internal Auditor, you are automatically alerted to risky or fraudulent transactions across your enterprise. For example, what if a team at Steinhoff was alerted when someone tried to backdate a transaction and flagged it as suspicious? And what if it could correlate the transactions across all of your applications, not just your ERP, to find this activity? That could save you… $12 billion!
Click here to learn more about how you can accomplish this.
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