How to Manage the Business Risk of Fraud
The management of fraud as a business entails planning on how best to prevent, deter, and detect frauds. It also includes enforcement of anti-fraud policies. In today's world every organization is exposed to the risk of fraud, what determines the success of risk management is the response with which an organization applies to counter fraud. The seriousness with which the senior management of any organization give to fraud risk management ultimately determines the success or failure of fraud management.
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Instructions
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Introduce a fraud policy statement in your organization. The fraud policy statement acts as a foundation stone for the organizations anti-fraud efforts. The fraud policy statement should provide clear guidelines on how to prevent and deal with cases of fraud in the organization. It should also indicate clearly how fraudsters will be punished.
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Introduce an ethics policy in your organization. The ethics policy acts as a support for the fraud policy statement. It should clearly indicate the accepted business code of conduct by emphasizing the norms and values of the organization. It should be clear and easily understood by all employees.
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Promote the policies at all levels of the organization. Ensure all members of staff and clients of the organization have a copy of the fraud policy statement and ethics policy. Provide anti-fraud training for employees so as to enable them to detect and respond to instances of fraud effectively.
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Introduce a whistle blowing policy that is supported by the senior management. It should encourage people to come out and report cases of fraud or malpractice. It should provide for the protection of whistle blowers. Provide a hotline through which people can report cases of fraud without disclosing their identity.
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Continuously monitor the adherence to internal controls and procedures. Identify areas of weakness and rectify them before fraud occurs.
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Tips & Warnings
To effectively manage fraud,consider fraud risk as an integral part of an overall corporate risk management strategy.
