I have seen many companies where managers do nothing to prevent fraud. Some companies only have a strategy to check fraud. In today’s sensitive business environment, it becomes necessary for each company to feature a fraud management plan for prevention. There are many companies around that have witnessed a decrease in their incidence of fraud after they developed a foolproof anti-fraud program.
The biggest challenge with fraud management is the underestimation of the risk of fraud. Those who have not suffered from fraud previously will not know the risks and costs. One always consider the direct financial costs but he or she must consider other costs such as consequential loss, legal and investigative costs, regulatory fines, management time, increased insurance premiums, loss of key staff and customers and increased cost of financing or the inability to raise new financing.
A good company should always show its employees and stakeholders that any kind of fraudulent activity would be considered serious and followed by the disciplinary action. The company policy is the best place to lay down the details of fraud management plan. Another important point that should be considered is suspicious activity reporting. Employees should told that any kind of suspicious activity reporting will be appreciated that would eventually lead to loss.
The biggest challenge with fraud management is the underestimation of the risk of fraud. Those who have not suffered from fraud previously will not know the risks and costs. One always consider the direct financial costs but he or she must consider other costs such as consequential loss, legal and investigative costs, regulatory fines, management time, increased insurance premiums, loss of key staff and customers and increased cost of financing or the inability to raise new financing.
A good company should always show its employees and stakeholders that any kind of fraudulent activity would be considered serious and followed by the disciplinary action. The company policy is the best place to lay down the details of fraud management plan. Another important point that should be considered is suspicious activity reporting. Employees should told that any kind of suspicious activity reporting will be appreciated that would eventually lead to loss.
