Welcome to this month’s LTT.
You work for a mobile operator in a country with a very high corruption perception index, as defined by Transparency International. The marketing team is planning to launch their latest product, a Mobile Money service, which allows customers to remit money overseas. Customers “cash-in” their money at service kiosks, and the same amount is credited to their eWallet. When a customer wants to send money to an overseas recipient, they receive an SMS with a unique 16 digit code. The recipient then goes to their nearest “cashing-out” facility, and presents the teller with the SMS and they receive the cash.
All of the “cash-in” received is deposited into a holding account at the local bank.
The marketing team want you to put some controls in place to detect any fraud, so you ask them for the product service description, and technical solution design documents. Unfortunately, since the business has been in such a hurry to get the service launched before the other operator, these documents do not exist. The launch day is tomorrow, so you need to act quickly.
With the limited information you know about the service, you decide upon the following key controls.
- A daily cash-in reconciliation: all the money collected at the service kiosks matches the total amount credited to the eWallet, and is deposited to the company’s holding account
- A daily eWallet reconciliation: (opening balance) – (closing balance) + (cash-in) – (cash-out) = 0
- A daily balance reconciliation: eWallet balance = holding account balance at the bank
If these high-level controls are performed and everything reconciles, is it still possible for any fraud to be committed without being detected by these controls?
- A = Yes
- B = No
If your answer is A = Yes, please state how the fraud could be committed.
Please send your response to [email protected] – the most comprehensive answer received will be published on Monday 26 January.