Methods of Preventing Fraud by the Example of Procurement

Currently, abuse is most widespread in the procurement cycle, which can have devastating consequences, ranging from financial damage to loss of confidence by stakeholders such as investors, customers and suppliers. The possibility of fraud in procurement arises when a company participates in a commercial or public tender, or when it purchases goods and services for its own use. In Russia, companies are more likely to face fraud in the procurement of goods and services compared to the global average. The purpose of this study is to develop a methodology to prevent fraud, identify factors that affect the risk of fraud, and approbation of the obtained methodology for the example of procurement activities of the oil and gas industry. The scientific novelty of the research is that the topic is examined in detail in the sectoral context by the example of a specific business process with further approbation of the developed methodology within the chosen organization. Most of the work on this topic does not affect industry specificity and produces generalized results. The research conducted in this paper argues for the need to take into account industry affiliation and demonstrates the practical applicability of the author's method of preventing fraud by the example of procurement activities. The results of the research can be used in practice by stakeholders, namely: top management and owners of companies, internal and external auditors, third-party investors - to prevent fraudulent activities in the procurement process and improve the quality of business in general.