Fraud Prevention

Topics: Internal control, Internal audit, Auditing Pages: 5 (1619 words) Published: August 28, 2011
Ashley Davis
Security and Loss Prevention

This paper is about the benefits of a comprehensive control program. It will also talk about what would be the benefits from a control program. It will also talk about what procedures should be taken into consideration for the controls, including independent checks, and a system for the documents and records. It will go into talking about a fraud hotline program to help detect fraud and also preventing fraud.

Fraud Prevention
Management is aware of the increased requirements for a public company to maintain a system of internal control to help prevent and detect fraud. The CEO, Mary Moore, is also interested in using a proactive posture toward building an antifraud prevention program, including exploring using a proactive auditing approach to fraud discovery. The internal auditor and the external fraud investigator as well as accounting and consulting firms have discussed proactive approaches for detecting fraud.

Before you can really figure out what the benefits of a comprehensive control program is. You have to know what a comprehensive control program is. A comprehensive control program is fraud education: teaching employees about the risk of fraud, Fraud Investigation: investigation instances of fraud, and Fraud Prevention: evaluating, designing, and implementing controls that proactively prevent fraud.

Now that we know what comprehensive control program is we can go into detail what the benefits are for each one. Fraud education is very beneficial to the company because without knowledge of something how would you be able to understand and to detect what fraud is and how it is committed. (Sullivan, 2005) “There are many ways you can educate your employees about fraud and what the risk are. Fraud policies should be given to new employees. New employees should sign a statement confirming that they received the fraud policy document and that they read and understood the policies. Signed statements give organizations stronger grounds for discharging dishonest employees by protection against wrongful termination suits by showing that an employee had agreed not to take part in the fraudulent behavior. Fraud policies should be reviewed by all employees on an annual basis as part of your jurisdictions ongoing antifraud education program.” Fraud Investigation is also a key asset to help your company. Knowing what to look for in a fraudulent case or someone trying to commit fraud you will know what to look for. (PInow 2011), “Most fraud investigations begin with a meeting between the investigator and the client. The person launching the investigation explains to their investigators why they suspect fraud has taken place and hand over any evidence they have to the investigator. A good fraud investigator will use this initial information to find more evidence and more facts. A fraud investigator may use surveillance, asset searches, background checks, employee investigations, business investigations, and other types of methods to get to the bottom of a case. In most cases, fraud investigations are investigations of white collar crime, which involves surveillance and careful consideration of complicated financial records.”

The best benefit of the comprehensive fraud prevention components program is the fraud prevention. If you know how to prevent fraud then you have a better chance of prevent you or your company from fraud. The final key component encompasses the reactive measures an organization has in place to address fraud that is found. These include how the investigation will be carried out and by whom, who should be notified, the disciplinary action that will be taken, and, if feasible, how funds will be recovered. Strengthening controls to mitigate the risk of re-occurrence is another reactive measure. (Phillipps,2011)“By following some key principles, company directors and management can put in place a program to...

References: FDIC, Initials. (2005, August 16). Financial institution letters. Retrieved from
Lister, L. (2007). A Practical Approach to Fraud Risk: Comprehensive Risk Assessments can
Enable Auditors to Focus Antifraud Efforts on Areas where their Organization is most
Vulnerable. Retrieved August 19, 2011 from
Phillipps, T. (2011). Framanagement wake-up call: fraud prevention no longer discretionary. Retrieved from
PI, (2011). Fraud investigation. Retrieved from
Sullivan, G. Office of the Inspector General, Guide to Developing and Implementing Fraud Prevention Program. (2005). guide to developing and implementing fraud prevention program (. CR-1094-21-30-4/05-IGO). Massachusetts: Retrieved from
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