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Business continuity plans are essential for mitigating risk

Written on Dec 2, 2021

By Jessica Salerno, OSCPA senior content manager 

Continuity plans can make or break a business, as they can be a road map to either guide operations out of a crisis or into the wilderness. 

“We find that even in the best of times, many businesses don't have dedicated or sufficient resources and planning to mitigate the risk of fraud,” said Bryan Moser, partner of advisory services at Grant Thornton. “And when a business finds itself in a crisis situation, it's going to be even less likely that there's a sufficient focus on fraud.” 

 

Moser will discuss developing a business continuity plan and mitigating risk at OSCPA’s Dec. 10 Fraud and Forensic Virtual Conference. He said it’s vital for leaders of the business to use this plan to keep the business running when a crisis hits and mitigate fraud risk at the same time. 

It’s also highly unlikely that a business will develop a continuity plan when an emergency happens, Moser said, so leaders must develop them before an event occurs. This will give staff enough time to develop a structured roadmap and avoid creating something in panic. 

Not having a business continuity plan in place can also mean when an emergency occurs, other valuable business objectives are overlooked, he said. This could include not meeting customer orders, missing sales targets and losing out on competitive advantages because of the time and effort spent working on the crisis. 

One of the more common ways businesses are exposed to fraud is through vendor management. Moser said during the beginning of the pandemic many businesses were purchasing personal protective equipment that they had never bought before and doing it on a rushed timeline. 

“And you look at that type of a situation and realize you don't have the time to do the due diligence that you might otherwise do as part of your ongoing operations,” he said. “When you look at vendor risk management, vendor onboarding, and the whole process associated with dealing with vendors, it can be especially risky in these situations.” 

Although it might seem difficult for a business with a busy schedule to develop a continuity plan, Moser said it could help ensure the business’ longevity. 

“It's so critical that businesses think about what are the risks that can occur and have plans in place,” Moser said. “What are the risks that exist, and you think may become exacerbated during a time of crisis that's causing you to implement the business continuity plan?”