The Transportation Industry

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INTRODUCTION Fraud is a pervasive and omnipresent threat in the modern business environment. While the controls to help mitigate the risk have become increasingly sophisticated, so too have the methods in which employees, managers and even third parties defraud victim entities. While some industries seem more at risk than others it is important to recognize the vulnerability that is common to all of them. One industry that seems to be able to avoid the worst of fraudulent acts is the Transportation Industry. Through use of time tested control methods and avant-garde procedures to help mitigate business risk, the industry is able to consistently place ahead of others in rates of fraud occurrences. MAIN BODY Background The transportation…show more content…
An example is an airlines heavy reliance on real-time systems to book flights, manage flights, and make sure planes aren’t flying into each other in mid-air (McMahon, 2014). The airline industry has recently been focusing inwardly on revenue growth, yield management, and balance sheet strength. The permanent threat of terrorism creates an element of uncertainty when it comes to an airline company’s operations. There are significant challenges to implement effective security and risk management systems. Large investments in required infrastructures are correlated to these challenges (PriceWaterhouseCoopers, 2014). There is also a strong demand for public transport recently as a result of environmental awareness and congestion. Railroads have difficulty meeting this demand because of a limited infrastructure capacity. This public transport competes with roads for investment funds and many planning processes for railroad projects take a long time to deliver (PriceWaterhouseCoopers, 2014). The shipping subsector contributes an extreme amount to global transportation and logistics. It has been historically cyclical with volatility in vessel values, shareholder returns, and freight rates. The international economic and political environment also has a large effect on shipping. The business environment is challenging with a few specifics risks. Risks include increasing regulation, a risk
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