Fraud is an ever-growing problem for corporations, and with the current economic climate more firms are being hit than ever before.
- UK corporations lost £960m in 182 cases of fraud reported to authorities in the half year to June 2009, the highest six-month total since 2003
- At this rate, UK companies are on track this year to surpass the record for annual losses of £1.37bn set in 2006
Companies will never be able to eliminate fraud entirely; however, you can prevent some things from happening to lessen the financial impact to your company. Now more than ever, you need to take care to put in place and strengthen anti-fraud measures.
By taking the steps below, you may have a better chance to fight fraud:
- Carry out a fraud risk assessment - including results from past reviews and audits to identify the biggest risks and vulnerable areas, and including mitigating actions for each risk
- Improve controls - including making sure they cannot be compromised by collusion or management override.
- Put in place an effective governance structure - including appropriate lines of authority, Board oversight, proper authorisation of transactions, and communicating key messages from the top
- Monitor activities - including independent checks on performance and compliance with policies and procedures
- Improve security of physical assets, access to data and money
- Segregation of duties - splitting up activities so no employee has control over a whole process from start to finish
- Education - teaching and training employees about the risks of fraud and what to do if they suspect fraud
Although hit by fraud, it is often possible to recover. The vital thing is to ensure that the lessons that have been learnt the hard way are not lost.
An important step to recovery is to conduct a complete review of your organisation's processes, controls and governance. This should help discover where improvements can be made to any vulnerable points within your company.
