Impacts Revealed: Scrutinization of Suppliers to a Construction Tool Manufacturer
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October 25, 2023
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A leading German-based global manufacturer of construction tools (“the Group”) sought to address procurement irregularities in its supply chain. It engaged FTI Consulting to probe into potential fraud among suppliers.
Our Impact
The client was able to strengthen its commitment to ESG thanks to FTI Consulting’s investigation and enhance transparency along the entire supply chain.
- As a result of FTI Consulting’s investigation, the Group was able to identify suppliers impacting the company’s ESG commitment.
- FTI Consulting’s findings provided guidance for the client’s internal audit team, enabling them to pursue targeted on-site investigations of suppliers exhibiting irregularities.
Situation
The Group’s management implemented a global environmental, social and governance (“ESG”) commitment. To ensure compliance, the company planned to test a systematic method to detect procurement irregularities in its supply chain. In the process, it identified signs of fraud involving specific suppliers. The client’s chief compliance officer engaged FTI Consulting to probe into potential anomalies among its suppliers.
Our Role
- The team conducted a deep dive into supplier data spanning one year from 60 Group companies across more than 40 countries and more than 150,000 suppliers from more than 150 countries.
- To identify fraud, FTI Consulting scrutinized invoices for unusual patterns, like significant backdating, creation outside business hours, posting on weekends and suspicious keywords.
- The team examined suppliers who were conducting business despite having purchasing blocks or deletion flags, as well as instances of missing or matching bank details and recurring invoices to one-time suppliers.
Published
October 25, 2023
Key Contacts
Senior Managing Director, Head of Germany Technology, Co-Leader of EMEA Technology