5 Fraud Tips Every Business Leader Should Act On

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AUTHOR'S POST

Mandy Moody, CFE
ACFE Media Manager

Organizations around the world lose an estimated 5 percent of their annual revenues to fraud, according to the ACFE’s 2014 Report to the Nations on Occupational Fraud and Abuse. A single instance of fraud can be devastating: the median loss per fraud case in the ACFE study was $145,000, and more than a fifth of the cases involved losses of at least $1 million.

The good news? There are some basic steps your organization can take immediately to lessen your vulnerability to fraud. During this year’s International Fraud Awareness Week, remember and share these five tips:

  1. Be Proactive. Adopt a code of ethics for management and employees. Evaluate your internal controls for effectiveness and identify areas of the business that are vulnerable to fraud.
  2. Establish Hiring Procedures. When hiring staff, conduct thorough background investigations. Check educational, credit and employment history (as permitted by law), as well as references.
  3. Train Employees in Fraud Prevention. Do workers know the warning signs of fraud? Ensure that staff members know basic fraud prevention techniques.
  4. Implement a Fraud Hotline. Fraud is still most likely to be detected by a tip. Providing an anonymous reporting system for your employees, contractors and clients will help uncover more fraud.
  5. Increase the Perception of Detection. Communicate regularly to staff about anti-fraud policies, ways to report suspicions of misconduct and the potential consequences (including termination and prosecution) of fraudulent behavior. 

Implementing these tips could help prevent your organization from becoming a statistic — so take action today. Find more free resources like this at FraudWeek.com.

International Fraud Awareness Week Shines Spotlight on Fraud Detection

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Organizations around the world lose an estimated 5 percent of their annual revenues to fraud, according to the ACFE’s 2010 Report to the Nation on Occupational Fraud and Abuse. Applied to the estimated 2009 Gross World Product, this figure translates to a potential total fraud loss of more than $2.9 trillion.

There has never been a more important time to shine a spotlight on fraud. While fraud is a year-round concern, organizations are encouraged to put a focus on this issue among their employees, clients and the public during International Fraud Awareness Week, Nov. 7-13, 2010.

This weeklong campaign encourages business leaders and employees to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education.

You and your organization can help make a positive impact in the fight against fraud by taking the following steps today:

  • Become an Official Supporter. There's no charge to become an official supporter of International Fraud Awareness Week. You will receive downloadable anti-fraud resources, as well as a logo to post on your company or organization's web site. You will also be provided with a customizable press release to send to local media announcing your involvement in this important movement.
  • Reduce Risk. Send an email to clients outlining the risks and cost of fraud. Encourage them to reduce their fraud risk.
  • Influence Future Professionals. Speak to local university students enrolled in business, management and accounting courses about the importance of being trained in the detection and prevention of fraud.
  • Spread the Word. Encourage other colleagues and students to become involved with the ACFE in the fight against fraud.
  • Host an Anti-Fraud Seminar. Hold a free fraud prevention seminar for your company or your community.

Visit www.FraudWeek.com for more information.