It’s the 21st anniversary of International Fraud Awareness week! Preventing fraud in your organization is no simple feat. It takes everyone to do their part to create a culture of awareness and security. Although fraud prevention should be a year-round priority, this week is a great reminder of the importance of combatting fraud in organizations and how many times, it still goes unaccounted for. With the right tools and guidelines, you can combat fraudulent activity and keep your business safe and secure.
The Association of Certified Fraud Examiners (ACFE) recently released a guide for International Fraud Awareness Week that breaks down common workplace fraud activities and red flags to look out for. You can check it out here. As you read through the guide, here are three best practices to consider and implement at your business to minimize your risk of fraud:
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 fraud is constantly evolving with technology. 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.
Fraud Ethics at the Top
Fraud ethics should 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 was looking? 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 your organization’s culture toward fraud and ethics policies is a great way to evaluate where you stand and where improvements could be made. Utilizing a fraud hotline is also a cost-effective tool that is highly recommended.
At BerganKDV, we launched a fraud hotline called PlainSight to help clients report fraud and empower employees to speak up. Many times, fraud can be caught at the employee level so having tools like hotlines are essential, and it’s even more critical that team members know how to use them.
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. BerganKDV’s fraud assessment tools dive deep into your internal controls and provide practical recommendations to reduce risks while considering the costs to implement these recommendations.
These tactics are a great start to preventing fraud at your organization and should be considered if they are not already. Preventing fraud doesn’t have to be an intimidating or scary topic to navigate. At the end of the day, it comes down to ensuring your employees and business are safe and that team members feel empowered to speak up if needed and have the tools to do so.
If you have any additional questions regarding fraud prevention best practices, BerganKDV can help. Contact one of our certified fraud examiners (CFEs) today for further guidance and to learn more about our services like PlainSight. Let’s have a conversation!
Want more fraud prevention insights? Listen to our latest Up and Adam podcast where the BerganKDV Team discusses International Fraud Awareness Week, common signs of fraud and more! Listen here.