Transversal Controls: Advanced Internal Control Against Sophisticated Fraud Schemes

In an ever-evolving economic environment, fraud schemes are becoming increasingly complex and difficult to identify. According to PwC's Global Economic Crime and Fraud Survey, fraud sophistication is significantly increasing, reinforcing the urgency for companies to adopt continuous control solutions capable of proactively detecting these fraudulent networks. Eye2Scan's new transversal controls address this challenge by pooling data from different processes and offering a pre-programmed solution that optimizes resources and effectively prioritizes efforts, focusing attention on the most critical alert signals and embodying an advanced internal control approach.

What is a Transversal Control?

As part of advanced internal control practices, transversal control aims to establish continuous monitoring by cross-referencing data from independent controls. Drawing inspiration from process mining techniques, this approach goes beyond traditional controls that focus on isolated process steps. Transversal controls allow for examination of different interactions to detect anomalies, inconsistencies, or potential risks in a more comprehensive and integrated manner. These controls can be implemented continuously for real-time identification of critical anomalies or deployed on an ad-hoc basis to enable audit teams to comprehensively oversee full process cycles. The objective is to highlight systemic risks, such as the repetition of risky behavior across multiple phases of an operational cycle.

Benefits of Transversal Controls for Internal Controllers

Implementing transversal controls allows to gain three distinct advantages that transform their risk detection capabilities and resource allocation:

1. Holistic Process View

Transversal controls allow information from different process stages to be combined, providing the essential global view needed to detect correlations indicative of fraud or systemic dysfunctions. For example, instead of individually checking purchase orders, receipts, invoices, or payments – time-consuming tasks prone to errors – controllers can, with a single click, identify recurring behaviors within the same entity throughout the cycle.

2. Prioritizing Efforts Through Critical Alerts

By integrating cross-analysis of anomalies across all process phases, transversal control quickly detects areas where multiple risk indicators converge, generating a strong alert signal – a true "red flag" – across several variables. This prioritization allows controllers to concentrate their resources on the most critical and high-impact incidents, ensuring a rapid and effective response to potential threats. By ranking these alerts, the tool optimizes team time and skills, ensuring proactive and targeted risk management.

3. Reduction of False Positives

Cross-referencing anomalies detected across different stages helps identify strong signals and thus reduces the number of false positives. Transversal control refines the relevance of alerts, ensuring that only the most significant anomalies receive attention.

Concrete Example in the Procure-to-Pay (P2P) Cycle with Eye2Scan

In the Procure-to-Pay (P2P) cycle, traditional individual controls cover all phases, including purchase requisition, purchase orders, receipts, invoicing & payment.

Traditionally, each phase is analyzed independently, generating multiple anomalies – sometimes hundreds or even thousands – that the controller must examine one by one. It thus becomes difficult to determine if the same person appears at each step, which could indicate a fraud risk or a breach of segregation of duties rules.

Contribution of Transversal Controls with Eye2Scan:

Eye2Scan centralizes and cross-references data from specific controls of these different phases. Through advanced analytical approaches inspired by process mining, the tool analyzes information from multiple modules (finance, purchasing, accounting, and stock) to ensure, in particular, that critical functions are properly separated. For example, the solution can automatically verify that the same person is not responsible for both creating a vendor and processing payments associated with it, or that no payment is made without prior validation by an independent department.

This approach helps identify when the same user generates alerts on purchase orders, receipts, invoicing, and payment, revealing interconnected fraud schemes. Additionally, by combining this information with data from partner tools like Infolégale, which assess third-party reliability, Eye2Scan allows prioritization of very high-risk anomalies. This capability for continuous and pre-programmed analysis enables controllers to focus their efforts where red flags truly appear, thus ensuring optimal risk coverage.

Challenges in Creating Transversal Controls and the Eye2Scan Solution

Implementing transversal controls via BI tools is a complex task requiring advanced technical skills, the ability to manage substantial data volumes, and excellent information quality. With this expertise, Eye2Scan offers a turnkey solution:

• Pre-defined and Adaptable Transversal Controls: Controls are already pre-programmed in the platform, and users simply need to adapt them to their organization's specific management rules.
• Resource Optimization: Creating controls requires significant investment in time and skills, and even support from data scientists. Using Eye2Scan avoids these significant time and money investments. Everything is ready, and our experts (CSMs) can even program customized controls for you.
• Easy Integration: The tool easily integrates with data from various ERP sources and other business applications, enriching analysis and enhancing the effectiveness of transversal controls.

Transversal Controls: The New Strategic Standard for Fraud Detection

Fraud techniques are evolving at a rapid pace, making isolated traditional controls sometimes insufficient. Transversal controls represent a necessary evolution for audit and internal control professionals facing increasingly complex fraud schemes.

Companies adopting these continuous and automated transversal controls today aren't just strengthening their anti-fraud system - they're implementing a true advanced internal control strategy, fundamentally transforming their approach from a reactive posture to a proactive and strategic approach.

By enabling the identification of suspicious behaviors across all processes, this approach significantly reduces the blind spots where fraud typically hides. Unlike manual solutions requiring considerable resources and technical expertise, Eye2Scan offers a ready-to-use, customizable, and immediately operational solution.

Ready to revolutionize your approach to advanced internal control?

Discover how Eye2Scan's transversal controls can transform your risk management. Request a personalized demonstration today.