ALRAQABA . ISSUE 15
93
4. Vendor management
Organizations depend on outside vendors
to help them in their business. Vendor
management includes:
• Vendor background check: Organizations
must identify and select qualified and trusted
vendor. In addition, they should review their
business reputation, financial strength,
and experience.
• Controls for vendor master file management:
The master file is a database that includes
valuable records that contains:
1. The purchasing details (vendor name,
address, contacts, and purchasing terms)
2. Account payable functions (purchasing
terms, address, and general ledger account
number). Organizations have to establish clear
procedures for approving new vendors and
changing vendor master file record. However,
the employee who is responsible of the
vendor master file is not authorized to approve
invoices for payments.
• Vendor monitoring: To monitor vendors,
organizations should follow the same
standards used to approve that vendor.
Hence, ensure that they are still qualified
especially if there are red flags.
References:
•
• The international Anti-Corruption
Resource Center
• Cornell Law School
• Fraud examiners manual 2019
international edition
Conclusion
In conclusion, this article highlights the importance
of auditing contracts in order to ensure that they
do not include any false statements, fraudulent
misrepresentation, or deceitful conduct. Entities
must invest in their employees’ ethical manners
and loyalty to prevent and detect fraud. In
addition, paying attention to red flags and
investigating them when needed will have a huge
positive impact on the entity’s Assets. Moreover,
Entities must fight against fraud for many reasons;
if any particular entity is infamous for its fraudulent
acts then, it will lose both: assets, and reputation.
Finally, it is almost impossible to earn reputation
back in case of damage. Hence, negative
reputation is the worst loss for any entity.
Articles
