1. Be proactive
Establish and maintain internal controls specifically designed to prevent and detect fraud. Adopt a code of ethics for management and employees. Set a tone at the top that the company will not tolerate any unethical behaviour. Implement an employee reporting system, such as an anonymous hotline, to help uncover fraud.
2. Establish hiring procedures
Every company, regardless of size or industry, can benefit from formal employment guidelines. So when hiring staff, conduct thorough background investigations. Check educational, credit and employment history (as permitted by law), as well as references. After hiring, incorporate evaluation of the employee’s compliance with company ethics and anti-fraud programs into regular performance reviews.
3. Train employees in fraud prevention
Once carefully-screened employees are on the job, they should be trained in fraud prevention. Are employees aware of procedures for reporting suspicious activity by customers or co-workers? Do workers know the warning signs of fraud? Ensure staff know at least some basic fraud prevention techniques.
4. Conduct regular audits
High risk areas, such as financial or inventory departments, are obvious targets for routine audits. Surprise audits of those and all parts of the business are crucial.
For most firms, fraud examination is not a core business component. That’s why, when fraud is suspected or discovered, it is imperative to enlist the help of an expert.
Thanks to Academy for these five simple steps.