| Investigations carried out on fraud after the | | | | development of control procedures will only add |
| happening is very time-consuming and an | | | | value. They are in the best position to |
| expensive process by itself. Once a fraud is | | | | recommend the optimum controls which are |
| discovered, it's often necessary to investigate the | | | | highly effective and crucial to be setup. |
| situation to determine who was involved, how the | | | | 4. Educate Employees |
| fraud occurred, how much money was lost, and | | | | Employees in a company can be the company's |
| what evidence supports the allegations of fraud. | | | | best watchdogs. If management wants |
| Preventing fraud is far less expensive and far | | | | employees to help in detecting fraud, they must |
| more useful. It reduces the amount of money | | | | educate them on what fraud looks like, feels like, |
| lost to fraud, and also the need for fraud | | | | and how to report if any are found. Most |
| investigations and the money which need to | | | | employees just didn't know that they were in |
| support the investigations. There are 5 major key | | | | contact with fraud even if they do. Therefore |
| items to reduce fraud in companies: | | | | basic training for all employees on this is not only |
| 1. Hire Employees with the right ethical value | | | | important, but is Compulsory! |
| Other than finding people with the right skills and | | | | 5. Communicate the price of committing frauds |
| disposition for the department, and the company; | | | | The management can share the recent fraud |
| The other important fact is to employ those with | | | | happenings in some of the well known companies |
| an ethical history. Essential background checks are | | | | with their employees. They can also share the |
| easy to do and relatively inexpensive. Some | | | | consequences of those who have involved in the |
| important items of the background check include | | | | fraud, with the punishment or penalty that they |
| verification of past employment, contact the key | | | | need to face from committing the crime. |
| references, and audit if there are any criminal and | | | | In a nutshell, the cost to implement the basic |
| civil court checks. | | | | fraud prevention initiatives in a company can be |
| 2. Create Effective Policies and Procedures | | | | small, especially when it's compared to the |
| Prevention procedures on all kinds of fraud are at | | | | amount of money that could be lost to fraud. No |
| the heart of internal controls. While compliance | | | | doubt the long-term benefits of fraud prevention |
| with current regulations is important, having good | | | | activities are undeniable, actual accounting frauds |
| substantive controls that actually effective in | | | | did impact the reputation of the company to |
| preventing fraud is even more important. | | | | some negative extend. Thus, for the goodwill of a |
| 3. Seek essential advice | | | | company, fraud should be prevented and avoided |
| For maximum effectiveness, getting advice from | | | | by all means. |
| some of the experienced fraud expert in the | | | | |