16 Aug 2018

Clayton Utz Fundamentals of Financial Crime 02: Accounts payable

As long as accounts payable continues to be a large flow of funds from an organisation it will continue to be a target of both internal and external fraudsters.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.


Meg McKechnie: So to a criminal looking at ways to steal money from a business, the accounts payable department sometimes look like a poorly guarded money box.

As you know each time funds flow from your organisation, they will usually go from this area.  Email scams, vendor impersonation, bank account substitution and false invoicing are just some ways that we are seeing our clients being defrauded by criminals.

Daniel Heywood: One recent example that we have had Meg was a client who received an invoice from a supplier. Now on first glance the invoice came with an email, it had the right domain name, had the right details, right logo, but then on better inspection by the accounts payable clerk, the bank account details didn't match up. They also saw that there was spelling and grammatical errors, so if you have got the right switched-on person, you can pick it up before there is an issue.

Meg McKechnie: Recently we had a client who had an issue with bank account substitutions. About five days before an invoice was due, our customer was sent an email attaching a request to change the bank account details. Our customer processed that transaction, and proceeded to make the payment on the due date. About three weeks later, our client was asked, "where is our payment?". It was a bit unusual but they hadn't received payment. Our client called the customer and then found out what had happened.

Daniel Heywood: Now as a client you always have to remember controls – and controls really start with people, so if you have got the tone from the top, from management, you have got the right policies in place and you have got the right training, then you can rest assured that it is less likely that you are going to have any accounts payable fraud.