It’s the 20th anniversary of International Fraud Awareness week! Although the importance of preventing fraud has been prevalent for years, it is still a crucial factor that many organizations do not account for. Minimizing the risk of fraud in your organization is no easy feat, but with the right tools and guidelines you can combat fraudulent activity and keep your business safe from cyber criminals.
Curious how effective your company is at combating fraud? Check out the fraud prevention checklist here to see how your defenses stack up and where our qualified team of certified fraud examiners (CFEs) can help fill in the gaps. As you evaluate the checklist items, three key observations stand out:
1. Updated Training
Ongoing anti-fraud training is needed to keep employees educated and aware of new threats. When was the last time your fraud awareness training was updated? The landscape for fraudulent activity is constantly evolving as technology continues to be integrated with everyday life. Easy and effective practices that can help prevent fraud include strong internal controls, fraud hotline reporting tools, annual training for all employees on fraud risks, and easily accessible trends and resources.
2. Fraud Ethics at the Top
Fraud ethics start at the top of your organization. Is the tone at the leadership level one of honesty and integrity? Would your top management do the right thing if no one were looking? Key indicators of effective guidance include instilling code of ethics policies, communicating those policies to the entire organization and having an open-door policy and reporting mechanism for all employees to report potential fraud and/or fraud risks. An independent assessment of tone at the top and policies surrounding ethics is a great way to start the process. Fraud hotlines are a cost-effective tool that is highly recommended.
3. Strong Internal Controls
Internal controls are another key component to minimizing fraud risks. How effective are your internal controls in combating fraud? Your annual external audit likely reviews internal controls briefly but is not designed to address fraud risks specifically. The most susceptible areas of your business that you should keep an eye on are cash receipts, inventory, new vendors, and payroll. Our fraud assessment tools dive deep into your internal controls and provide practical recommendations to reduce risks while considering costs to implement these recommendations.
After reviewing the checklist, are there more tactics your company could be implementing to stop the threats of fraud? If you have any questions regarding fraud prevention best practices and common mistakes to avoid, we invite you to reach out to one of our CFEs for further guidance. We are here to help. Start here.