How to thwart supply chain predators

Supply chains are very much at risk from criminal elements these days. Chances are quite good, in fact, that your company has already been the victim of some sort of economic crime. According to a survey conducted by PricewaterhouseCoppers, 45% of transportation & logistics companies reported being victims of economic crime over the last two years.

In response, PricewaterhouseCoopers has developed a whitepaper titled "Protecting Transportation & Logistics Companies Against Fraud, Reputation & Misconduct Risk" that provides guidance on how to develop an effective antifraud program.

"While it may not be possible to eliminate the risk of fraud altogether, a company can at least identify it early and minimize its damage with proper planning, policies and procedures," explains Ken Evans, U.S. transportation & logistics leader for PricewaterhouseCoopers.

A new whitepaper from PWC provides step-by-step guidance on how to develop an effective antifraud program that addresses not only financial statement risk, but also reputation, operational, legal and strategic risks. In addition, it provides a summary of fraud schemes that are common to the transportation & logistics industry.

PricewaterhouseCoopers suggests that corporations take the following five steps to develop an effective antifraud campaign:

1. Establish a baseline to assess existing antifraud programs and controls and develop a remediation plan.

2. Conduct a fraud risk assessment.

3. Evaluate design and validate operating effectiveness.

4. Address residual financial reporting fraud risks.

5. Standardize process for incident investigation and remediation.

The whitepaper details the following common fraud schemes impacting the

transportation & logistics sector: financial statement manipulation; misappropriation of assets; unauthorized receipts or expenditures; aiding and abetting; fraud by senior management; and disclosure fraud.

"Fraud management makes good business sense," says Evans. "A transportation & logistics company that establishes an effective antifraud program will go a long way toward maintaining or restoring investor confidence in the integrity of its financial results. Equally important, reducing fraud will help a company to lower costs, improve profitability, protect its reputation and mitigate liability."

For a copy of the whitepaper, "Protecting Transportation & Logistics Companies Against Fraud, Reputation & Misconduct Risk," visit www.pwc.com/transport

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