Stories from practice

19 February 2018

Uncovering a 2 million USD embezzlement by Ufuk DOĞRUER from TURMOB

How can professional accountants help you?

Accountants can help uncover financial crime if a company asks for help to explain unexpected losses via a special purpose audit.


Ufuk Dogruer, Auditor from Turkey, told us about his experiences:


Fraud costs companies money

A company loses about 5% of its annual revenue as result of financial crimes such as fraud and corruption, according to the 2016 Global Abuse report. A lesser known fact is that 40% of this fraud is committed by employees. Employee fraud not only affects the company owners and investors, but also other employees, stakeholders, credit institutions and the country’s economic stability.

Employee fraud: a needle in a haystack

In 2016 a top 500 global company contracted my services for a special purpose audit. While comparing the financial statements, the company’s management had noticed high losses in areas where, according to the sales figures, they were supposed to make a profit. After initial checks, the company identified signs of fraud, but could not trace the source nor the extent of the financial loss. The purpose of our audit was to examine the financial statements, identify the source and determine the amount of the fraud.

Preventing new fraud

At the end of the audit process, we identified the source and size of the fraud: an employee had embezzled 2 million USD. The staff member responsible for the fraud immediately refunded the full amount. Then we helped the company implement procedures to prevent new cases of fraud.

A major reason why this fraud could happen was the lack of proper internal controls.  Specifically, a checks and balances procedure between the employees and the management. In cooperation with the company’s management, we put in place:

  • new procedures for declarations, profit and loss and accounting records
  • a new internal control system based on a cross-control principle in the accounting records

This means, for example, that bank payments are limited to an amount depending on a person’s level of authority, and that bank withdrawals can only be done when two people sign for it.

This new system has immensely strengthened the company’s immune system to avoid experiencing fraud again.



Connect with
the author on 

Related content

Stories from practiceShaping the accountancy leaders of tomorrow

19 February 2018

In the mediaAn Overview of KAMs in the European Banking Sector

15 November 2019

PublicationEU Directive on Whistleblower protection

7 October 2019

PublicationKey audit matters in European Banking sector – update 2019

7 October 2019

Stories from practiceTo rebuild trust in auditors, we need the courage to speak up

7 October 2019

Consultation responseSir Donald Brydon’s Independent Review into the Quality and Effectiveness of Audit

10 July 2019

NewsWhy should I care about accountants?

2 May 2019

Stories from PracticeVolunteering for a more human approach

7 January 2019

Publication10 Most popular publications of 2018

11 December 2018

EventGovernance and fighting fraud and financial crime in the Digital Era

27 November 2018

Stories from practiceEmpowering accountants in emerging economies

1 October 2018

PublicationReporting key audit matters in the EU banking sector

28 September 2018

Stories from practiceChange is in the air? Help a country: send in the auditors

5 September 2018

SpeechRetaining trust in corporate governance

15 August 2018

Consultation responseIOSCO’s report on good practices for audit committees in supporting audit quality

16 July 2018

PublicationThe 5th Anti-Money Laundering Directive

22 June 2018

PublicationPreventing money laundering and terrorist financing

22 June 2018

Stories from practiceAuditing the coast, saving the beaches

30 May 2018

Consultation responseEC’s exchange of data to combat VAT fraud in the e-commerce

25 April 2018

PublicationFAQs on the auditor’s role in tackling financial crime

19 February 2018

Consultation responseIOSCO’s Monitoring Group consultation

31 January 2018

Sign up for our newsletter