⏱ Temps de lecture : 11 minutes
In a context where competitive pressure and economic uncertainty weaken the strength of firms, the risk of internal fraud remains one of the most underestimated dangers by managers. These are not just direct financial losses: any fraud that has been found undermines the credibility of management, undermines the trust of partners and jeopardizes the reputation of the organization.
However, most frauds do not arise from sophisticated schemes, but rather from weaknesses in internal oversight An unwritten delegation, a badly held caisse, an unlocked computer access... so many breaches that, combined, create fertile ground for abuse.
This is all the more worrying as entrepreneurs sometimes inadvertently give the signal : tolerance against deviations, lack of exemplary or clear frame. In this case, collaborators quickly understand that "rules are optional”.
The aim of this article is not to add bureaucratic complexity, but rather to propose a pragmatic reading of the most common deficiencies, their possible consequences and especially good practices to be implemented.
By appropriating these levers, you will not only strengthen the financial security of your organization, but also the culture of trust and responsibility that determines its sustainable performance.
Conductive wire : think "PROA” – Preturn by clarity (organization, procedures), Rreduce opportunity (separation, locking), Observer and correct (second level controls, KPIs), AThis will be done by example (culture, sanctions, training).
The main flaws that open the door to fraud
Before considering good practice, it is essential to understand where areas of vulnerability are located in an organization. Fraud does not arise by chance: it feeds on the blind corners of internal control, often known but underestimated.
Lack of clear organization chart, poorly defined delegation of power, inadequate segregation of tasks, non-existent second-level controls... all these situations create a enabling environment for abuse. These deficiencies, whether organisational, procedural or cultural, weaken the company's ability to detect and prevent fraudulent behaviour.
We will therefore review the main points of fragility met in many companies, explaining for each:
- Why this flaw favours fraud,
- What risks and consequences it entails,
- What practical recommendations can be addressed.
1) Absence of hierarchy
Why is it a problem?
Without an official and up-to-date organization chart, no one clearly knows who decides, who validates, who controls. Approval circuits become informal and bypassable.
Risks & consequences
- Decisions taken by unauthorized persons.
- Conflicts and grey areas abuse of authority and collusion.
- Dilute responsibility low traceability in case of incident.
Recommendations (procedures)
- Publish a Organization chart (almost quarterly) + functional version (key processes).
- Disseminate a RACI benchmark (Responsible, Accountable, Consulted, Informed) for 10 sensitive processes: purchases, sales, cash, payroll, capital assets, SI, cash, fee notes, inventory, commercial discounts.
- Index the flowchart in all workflows (ERP/Purchasing tool): no commitment/order without actor "A" (Accountable) identified.
2) Lack of delegation of authority
Why?
In the absence of written delegations, decisions are based on habits ; thresholds and replacements are not set.
Risks & consequences
- Signature without mandatenon-applicable acts, disputes.
- Concentration of power risk of managerial fraud.
- Paralysis in the absence of the leader.
Recommendations
- Putting in place a Delegation matrix written:
- By field (legal, banking, procurement, HR) and by threshold (€ / nature / duration).
- Rule of 4 eyes beyond a threshold (double signature).
- Set Credentials in banks, ERPs and purchasing tools (rights = delegation).
- Register of delegations: versioned, signed, reviewed Annually or each HR movement.
3) Poor job description
Why?
A lack of job descriptions create overlap and "orphan" tasks.
Risks & consequences
- Ability to accumulate incompatible roles ("incompatible duties”).
- Weakness of replacement controls (interim).
- Performance evaluations disconnected internal controls.
Recommendations
- Standardized job forms: Missions, scope of authorisations, incompatibilities, control indicators(e.g. error rates, reconciliation times).
- Integrating a internal control clause in each form: compliance obligations, alerts.
- Onboarding process : checklist access rights and Training related to the post.
(4) Poor segregation of duties (SoD)
Why?
Job separation reducesopportunity fraud: the same person must not create, approve and settle An operation.
Risks & consequences
- Fraud by handling invoices, fictitious suppliers, unauthorized payments.
- Black box / diverted stocks.
Recommendations
- Set a SoD matrix by process:
- Purchases: request
- Sales: customer creation
- Pay: variable input
- Enable compensatory controls if size does not allow separation: independent review hebdo, audit logs, rotation of tasks.
- Tool: workflows with 4 Eye Rule, self-approval alerts, reports SoD violations monthly.
(5) Lack of second level control
Why?
The first level runs; 2nd monitor and correct (periodic checks, independent of operation).
Risks & consequences
- Errors and diversions Not detected.
- Difference between "on-paper" procedures and field reality.
Recommendations
- Plan Key controls (monthly/quarterly): bank reconciliations, analysis of sensitive entries, review of IS accesses, testing of supplier/client samples.
- Risk mapping and KCI (Key Control Indicators):
- % payments out of order form,
- nb. creations suppliers without KYC folder,
- average closing time and late manual writing.
- Reports to the Executive Committee with action plans, managers, deadlines.
(6) Computer Security DeficienciesWhy?
The IS is the nervous system : weak controls make it possible invisible manipulations.
Risks & consequences
- Unauthorised access, data modification (price, RIB), file exfiltration.
- Fraud change from IBAN and scams to the President (BEC).
- Insufficient traceability for investigations.
Recommendations
- IAM : identity management and rights by role (RBAC), principle of Less privilege, recertification quarterly access.
- Audit journals activated, unalterable, reviewed by a third party (Internal Control / DSI).
- MFA (banks, ERP), DMARC/DKIM/SPF for email, validation Off-band changes in IBAN.
- Backup 3-2-1, restoration, updated/patching controlled.
- Anti-phishing awareness and simulation twice a year.
(7) Conflicts of interest between employees
Why?
A conflict of interest is not illegal in itself, but Unmanaged, it opens the door to the favouritism and collusion.
Risks & consequences
- Choice of "friend" suppliers, overbilling, back commissions.
- Infringementintegrity decisions and reputation.
Recommendations
- Code of conduct + gift policy/invitations (thresholds, declarations, internal public register).
- Annual declarations interest on exposed functions (purchases, sales, finance, IT).
- Obligation to recusal (withdrawal of decision) and reviewed by a Ethics Committee.
- Contract clause and graduated sanctions in the event of non-compliance.
(8) Sensitive operations not locked
Why?
Some transactions (discounts, assets, exceptional discounts, journal entries, out-of-cycle transfers) are highly fraudulent if not framed.
Risks & consequences
- Creation of holes in the audit trail.
- Contouring of discount ceilings, margin makeup, "cleaning" accounts.
Recommendations
- White lists sensitive operations + thresholds by role.
- Mandatory workflows with hierarchical approval and justification codified (predefined reason).
- Reportsexceptions automatic: manual writing > X €, discounts > Y %, unplanned transfers.
- Monthly review by Finance / Internal Control with Audit trail.
(9) Deficiency in checking expense notes
Why?
There are many, small, and therefore favourable abuse if the framework is unclear.
Risks & consequences
- Double refunds, notes without justification, personal expenses disguised.
- Failure to comply with tax obligations (VAT, ceilings).
Recommendations
- NDF policy clear: eligible categories, city/country ceilings, submission deadlines, parts Mandatory, prohibited (alcohol, cash, gifts > X €).
- NDF tool with OCR, duplicate detection, geolocation the per diem perimeter.
- Validation manager + Finance control (2nd level) on sample Targeted by risk.
- Indicators: % missing supporting information, average approval time, top 10 exceedances.
(10) Bad cash flow procedures
Why?
The body concentrates Cash and transactions with high volume: each fault is a temptation.
Risks & consequences
- Diversion, gaps Recurring, manipulation of repayments.
- Differences between sales, cash and bank deposits.
Recommendations
- Cash register daily, continuous numbering, closure by an official separate cash flow.
- Approximation day-to-day: caisse
- Surprise inventory cashier rotation, sealed lockers.
- Policy reimbursement (motif, ceiling, proof of purchase, double validation).
- Bank deposits frequented (J+1), traceability of discounts.
11) The hierarchy sets the wrong example
Why?
Culture "do as I say, not as I do” cancel any procedure. Teams imitate what leaders do do, not what they Say.
Risks & consequences
- Implicit tolerance of sprains standardization of deviance.
- Low alert signal suffocated, omerta, departure of integrity talents.
Recommendations
- Tone at the top : Leaders submitted the same rules (NDF, gifts, conflicts of interest).
- Zero tolerance : any managerial sprain documented and sanctioned as a model.
- Alert channel (whistleblowing) confidential + protection of whistleblowers.
- Communication quarterly compliance and corrective actions.
To (re)install robust internal control
Stabilize
- Publish flowchart & RACI.
- Stop it Delegation matrix and implement the double signatures.
- Blocking sensitive transactions in the tools (thresholds, workflows).
Secure
- Deployment SoD + compensatory checks.
- Launch KCI + steering dashboard.
- Policy NDF & body : training + sample checks.
Anchoring
- Review of SI access and MFA activation.
- Implement the alert channel and Ethics Committee.
- Targeted audits (new suppliers, discounts > Y %, manual entries).
Closing Remarks
Anti-fraud device effective is not a pile of documents: it is a clear organization, separate incompatible roles, regular checks and one example constant at the top. By implementing the above recommendations, you reduce drasticly The opportunity of fraud while improving the quality of your decisions and the confidence of your teams.
Fraud and internal drifts are not inevitable. They find their roots in organizational weaknesses often known, but rarely treated with the necessary rigour. The introduction of internal control procedures is not only a defensive approach to blocking fraud ; It's first and foremost a strategic leverage to better manage your business.
An effective internal control system offers many advantages:
- He drastically reduces financial risks preventing diversion and securing cash flows.
- He Protects reputation and credibility of the company to financial partners, customers and investors.
- He clarify responsibilities and fluidizes decision-making, eliminating grey areas where abuse occurs.
- He improves the quality of financial informationmaking results more reliable and facilitating strategic choices.
- He strengthens the culture of ethics and transparency, essential for attracting and retaining competent and integrity collaborators.
For the leader, to adopt and enforce these procedures is to install a real organizational shield They not only protect against fraud, but also structure the company to support its growth, withstand crises and inspire long-term confidence.
In the end, internal control is not an administrative constraint. It's a investment in security, performance and sustainability. A leader who makes it a priority sends a strong signal: in his company, rigour and transparency are not options, but foundations on which to build the future.
