Why can collusion with vendors be particularly damaging?

Collusion with vendors can be particularly damaging primarily because it often requires the involvement of multiple parties, including various employees and hierarchy levels within an organization. This complexity makes it challenging to detect, as the coordinated efforts are designed to bypass normal checks and balances. When several individuals or departments collaborate, they can manipulate processes, create false documentation, and effectively shield their activities from standard oversight operations. This makes the fraudulent activity not only harder to identify but also difficult to bring to justice if it remains hidden for an extended period.

The nature of collusion allows those involved to execute fraud on a scale that typically exceeds the detection capabilities of regular auditing and compliance measures, especially if multiple approvals are worked into the scheme. This multifaceted approach often leaves a trail that is not easy to trace back to the original perpetrators, thus compounding the risk and potential loss incurred by the organization.