June 7, 2023
Expense reporting platforms have simplified the review and approval processes, making it easier to submit documentation for payment. However, this convenience can also lead to less stringent review of submitted documents and opportunities for changing electronic receipts. As a result, organizations need to implement best practices to reduce the risk associated with these reporting systems. In our work with clients, we recommend key practices that can enhance the effectiveness of expense reporting controls and mitigate the potential for fraud.
Update Your Review and Approval Processes
Establishing clear guidelines is essential to ensure proper scrutiny of expenses. Make it clear who is responsible for the detailed review of supporting documents and who is responsible for high-level reviews. This helps distribute the workload and ensures that both comprehensive and overview checks are performed.
Conduct Ongoing Monitoring
Consider conducting random spot checks of expense documentation to detect any irregularities or fraudulent behavior. These checks act as a deterrent, sending a message that expense reports are reviewed and fraudulent actions will be detected.
Utilize Big Data
Leveraging data analytics tools and platforms can provide valuable insights into expense reporting patterns and detect anomalies.
Business Intelligence platforms like Tableau or Power BI consolidate and analyze expense data over time. These platforms help identify spending patterns, unusual activity, and potential anomalies that can be indicative of fraudulent behavior.
Artificial Intelligence platforms like Mindbridge analyze expense data and identify potential risks. These platforms use machine learning algorithms to flag suspicious transactions and assist in the sampling process for ongoing spot checks.
GRF Can Help
Adopting these best practices can reduce the risks associated with expense reporting. GRF’s certified professionals provide risk-based internal audit solutions across all aspects of operations for domestic and international organizations. We can help prioritize and assess key processes to identify vulnerabilities, enhancements, opportunities for automation, and best practice recommendations.
For any additional questions, feel free to contact the GRF team, or reach out to us at the contact info below.
