Fraud Prevention Solutions —Knowledge is Power
It is a well-known “secret” that the most effective fraud prevention solutions center on management’s involvement. The growth of internal fraud —and in many cases its ability to go unnoticed for years—clearly signifies that those fraud prevention solutions used today to combat these crimes are highly suspect at best. For example:
- The total annual losses to internal fraud and embezzlement are astronomical. You don’t get such huge numbers unless those current fraud prevention solutions are drastically flawed.
- It is common for several years to elapse between the time the initial act took place and the day of the scheme’s discovery. Another sign that fraud prevention solutions are inadequate.
- Many managers do not have adequate knowledge regarding how acts of internal fraud and embezzlement occur and what fraud prevention solutions work best within their operation.
Four Fraud Prevention Solutions That Really Work
- Pre-employment Screening: The first step in preventing dishonesty is taken at the point of hire. When it comes to hiring for positions of trust—including finance and other cash-and-asset-sensitive jobs, a thorough background screening process is critical.
- Climate of Honesty: Every manager has an enormous influence on the climate of honesty and the ethical conduct of every person in the business. As opportunities present themselves, openly discuss with employees your operation’s definition of honesty. Take nothing for granted.
- Confidential-Hotline Programs: Seriously consider implementing a hotline program. Keep in mind that the greater majority of internal fraud that is uncovered happens either by accident or through a “tipster’s” information.
- Communications: Our research concluded that one of the most effective fraud prevention solutions was to discuss this problem and involve your employees in working up reasonable fraud prevention solutions during group meetings. Education and re-education are integral.
The above strategies will help with your initial fraud prevention solutions. However, to learn more strategies on developing effecting fraud prevention solutions, order your copy of Business Fraud: From Trust to Betrayal today!