Efficient Techniques of Corporate Fraud Detection & Prevention
by Venus Detective Female detective agencyFraud has become a prime concern
in the worldwide phenomenon. It is a quite serious concern, and dwells in all
countries and affects all types of business, small and big industries, and
their profitability also. To get rid of it firstly, it is quite important to
know ‘why’ fraud occurs and ‘how’ to combat it. The most effective way to
detect fraud is an anonymous tip line (or website or hotline). According to the
ACFE (Association of Certified Fraud Examiner) 2018 report of the Nations, tips
are by far the most common method of initial fraud detection. There are some
most common methods of detecting fraud
Internal
Audits: An internal auditor has also done lots of the
same work as external auditors for fraud detection. According to ACFE, the
internal auditor is the second most important method of fraud detection. The
internal auditors manage and detect all types of frauds, but external auditors
manage financial fraud issues. It is important because in most of the
organization's fraud is identified only after it occurs.
External
audits:
AU-C Section 240, Consideration of fraud in financial Statement audit requires
that financial statement auditors conduct their audits in such a way to obtain
reasonable assurance, that financial statements are free from objects
misstatement, whether caused by fraud or error.
Management
Review:
Much organization had their dedicated department devoted to fraud detection and
information security. Such departments work under the control of a chief
information officer, internal auditor, or controller. Or such departments
managed independently in their functional areas.
Accidental
discovery:
In passive fraud detection, the organization discovers fraud by accident,
unsolicited notification by another party, or confession. It occurs when
fraudster frequently makes some mistakes by failing to adequately cover their
tracks. Because of these reasons now efficient organizations started to train
their employees to spot and report irregularities.
These are the topmost way that
occupational frauds are initially detected. There are several ways you can
minimize the occurrence of fraud by implementing procedures and controls.
·
Hire trustworthy Experts
·
Know your employees
·
Implement internal controls
·
Make employees aware/ Set up a reporting system
·
Monitor vacation balance
·
Live the corporate culture
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Created on Feb 18th 2021 04:09. Viewed 330 times.