TPD17020 - Fraud and theft: Prevention and detection of fraud

The trader’s staff at management and supervisory level have the greatest opportunity to arrange for the improper removal of goods and to conceal the loss (either for corporate or personal gain). There can be no comprehensive list of possibilities but such concealment may be attempted by the following means.

• Excess and unrecorded production.
• Fictitious removals for purposes that do not require duty payment (for example, inter- premises removals or removals for exportation).
• Falsification of accounts for goods received;
• Double recording of duty-paid clearances (eg duplicated notations of duty payments, possibly confused by accidental transposition of figures).
• Switching of consignments (with “mis-picking” being used as an alibi if the switch is detected).

The trader is responsible for taking the action necessary to safeguard the revenue on tobacco products in registered premises. The main emphasis of official action must be to ensure that the trader’s controls are fully effective. Although your audit plan should identify the checks needed to monitor the trader’s own controls, the need for vigilance and additional controls to discover and prevent fraud should always be borne in mind. The checks and controls will, of course, include those concerning computerised accounts.

It is good practice to maintain an incident book for each set of registered premises and record all trader omissions and irregularities together with a record of the action taken.