Managing
the risk of fraud from a business's perspective requires a structured and not a
random approach. Develop a fraud prevention and detection program as per your
overall efforts for risk management. This can insulate the company from
business fraud that erodes consumer trust and cuts profit margins. Report
business fraud to protect your company from the implications of scams. Explore
how to report business fraud in this guide detailing fraud risk prevention
principles and practice.
#1 Fraud Risk Governance is Vital
Fraud risk
management needs to be an integral part of the organizational DNA in terms of
defined responsibilities, ongoing procedures and protocols in place and clear
written policies for the board and management to set policies. Reporting should
be in place to convey required information about the scam. Report business fraud keeping a clear set of protocols and systems in place. Adequate resources
and access to top management running the fraud management program ensure proper
safeguards are in place.
#2 Fraud Risk Detection Measures Risk
Prevention
and detection of fraud is possible if there is a structured risk assessment
addressing actual risks placed by the company, as assessed in terms of:
●
Purpose
●
Industry(products or services)
●
Complexity
●
Scale
●
Exposure to Network Risks
The goal of
risk assessment is to assess the kind, chance and type of risks in the
traditional organizational framework. Programs for preventing and reporting
fraud should focus on mitigation that is cost effective. Assessment of fraud
risk involves checking the controls, policies and procedures interact with
specific roles. Risks can be internally as well as externally controlled.
#3 Fraud Prevention Works Even Better
Preventing
fraud is better than detecting it. Same systems and controls need to be in
place to prevent fraud and detect it. Prevention is rooted in fraud awareness,
a safe haven for whistleblowers and constant communication about fraud. Report
business fraud even if it does not directly involve your company, because it
could easily impact someone else's.
#4 Fraud Monitoring and Reporting Are Essential
Controls,
monitoring as well as reporting promote quicker detection of fraud. Chief
detection measures include policies,reports and outcomes in place to measure
fraud risk and assess the likelihood of fraud striking. Creating information in
the form of a report of business fraud is not enough, Fraud prevention also
involves reporting the scam in time to someone who can address the problem.
Report business fraud to the Better Business Bureau, FTC, or any other relevant
authority based on the nature of the fraud.
A systematic program in place can ensure that frauds are prevented or
their impact is controlled.
Fraud
management principles center around effective prevention, detection, monitoring
and reporting. Report business fraud to avert future scams and ensure continued
success of your company. Corporate culture has advanced to a point where fraud
has become a means of securing profit. This is why it is essential to nip this
self destructive element of business operations. True productivity is
fraud-free. Enron was not the most innovative company in America(contrary to
what Fortune magazine thought ranking them thus no less than 6 consecutive
times), it was simply the most corrupt. Business fraud cannot help companies to
get ahead. It can only put the corporate world back into the Dark Ages.
