Profit Recovery Systems—News

June, 2004 – Profit Recovery Systems develops a proactive Fraud Detection Program as an additional client service benefit of its Accounts Payable Review Services

Our publicly-held clients have recognized our Fraud Detection Services as a key component within their active fraud detection efforts as required under the Sarbanes-Oxley Act of 2002. Our proactive fraud detection tests are broken down into two distinct categories: Tests of Master Information and Tests of Transaction Detail.

Tests of Master Information are designed to identify indicators of “suspect fraudulent entities” or improper relationships between employees and trading partners (i.e. suppliers and customers). While identified suspect fraudulent entities are not necessarily engaged in illegal activity, their relationships may have a high likelihood of resulting from some form of undesirable activity such as non-arms-length negotiation or potential conflict of interest. Examples of such indicators are commonality of data elements between masters, known high-risk remit-to addresses and non-conforming field population.

Tests of Transaction Detail identify specific “suspect payment transactions” meeting unique and focused Fraud Detection criteria outside the scope of a traditional Accounts Payable Review. These tests encompass both AP and Payroll payments, and rather than seeking indicators of payment duplication, they target transactional characteristics indicating a high likelihood of fraud. Examples of such characteristics are invoice and payment timing, invoice number sequencing, and invoice amount analyses.

Both Tests of Master Information and Tests of Transaction Detail may also identify potential weaknesses within a client’s processes and control environment surrounding the procure-to-pay transaction cycle.

As the business community continues to react to the increased scrutiny of its internal control environment, we have developed additional strategic relationships with Certified Fraud Examiners to assist our clients in delving more deeply into the potential indicators of fraudulent activity which have been identified through our Fraud Detection Program.

Whether the results of our Fraud Detection Program are provided directly to an organization’s internal resources for further investigative analysis or are provided to an independent forensic accounting firm, these services have emerged as an initial step in the “best practices” fight against corporate fraud. Our fraud detection services are provided at no additional cost to our Accounts Payable Review clients. They are also offered on a stand alone basis for clients who do not require our comprehensive Accounts Payable Review services.