Case Study: Internal Audit Uncovers Fraud in a Mid-Sized KSA Enterprise

Internal audits play a crucial role in ensuring transparency and accountability within organizations. In this hypothetical case study, we explore how an internal audit uncovered fraudulent activities in a mid-sized enterprise in KSA, highlighting the importance of robust internal controls.

The Scenario

A mid-sized manufacturing company in Riyadh was experiencing unexplained financial discrepancies. The management initiated an internal audit to investigate.

Key Findings

Ghost Employees: Salaries were being paid to non-existent employees.
Procurement Fraud: Inflated invoices from a vendor with ties to an employee.
Unauthorized Transactions: Misuse of company credit cards for personal expenses.

Actions Taken

Fraud Detection: Leveraging data analytics to identify irregularities.
Policy Revision: Implementing stricter procurement and payroll controls.
Training: Educating employees on ethical practices and fraud prevention.

Lessons Learned

Regular audits are essential for identifying and mitigating risks.
Technology can enhance the effectiveness of fraud detection.
Employee training fosters a culture of accountability.

This case study underscores the importance of internal audits in safeguarding organizational assets. Businesses must prioritize strong internal controls and regular reviews to minimize risks and maintain trust.

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