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Fraud Fears, SOX Prod Companies To Increase Expense Report Auditing: Survey

www.btnmag.com

Due in part to the financial reporting requirements of Sarbanes-Oxley—which this summer marked the fifth anniversary of becoming U.S. law—corporations have stepped up travel and entertainment expense report auditing practices, according to Business Travel News' fourth annual Expense Manager Survey. Consultants, however, said a lack of automation is preventing respondents from reaching true auditing best practice status.

T&E expense fraud remained common among survey respondents. This year, 36 percent of respondents said they caught an employee trying to commit fraud through their expense reporting system in the past two years, higher than the 28 percent rate seen in the last two years of BTN's survey. Among companies with less than $2 million in annual U.S. booked airline spending, about three out of every five respondents reported T&E expense fraud.

Meanwhile, virtually all companies now audit at least some expense reports. Only 5 percent of respondents said they audited none, compared with 11 percent who did so in 2006 and 26 percent in 2005. On average, companies this year are auditing 58 percent of expense reports, and 39 percent audit every one that employees file.

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