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Fraud Prevention – what to do and how we can help

Fraud can take a number of different guises. Threats include fraud as a result of organised crime, such as theft of goods or business identity, infringement of intellectual property, internal fraud by employees and fraud by rogue customers and can come in many other guises too.

How to prevent fraud and minimise the risk

Internal controls can take the form of preventative – those that are designed to prevent fraud in the first instance – or detective – which should pick up items or events missed by the preventative measures or where the preventative controls have been circumvented. Both are equally important if your internal controls are to minimise the risk of fraud causing damage to your business.

Preventative Internal Controls include:

  • Ensuring adequate segregation of duties so that no single person is able to authorise, record and be in control of a financial transaction and the resulting asset.
  • Expenses approval ensuring no one can authorise their own expenses and requiring receipts/proof
  • Limiting access to equipment
  • Stock inventory
  • Verification procedures for example verifying email requests for changes to finance details via the phone
  • Schemes of delegations
  • Authorisation Limits
  • Audit trails

Detective Internal Controls include:

  • performance reviews, such as budgets, forecasts and other benchmarks, tracking of which should highlight any unexpected or unusual results
  • Regular reconciliations as part of effective financial management
  • External audits from independent accounting firms
  • Internal audits of assets such as inventory.
  • Internal audits of procedures and controls to detect adequacy

What to do if fraud is detected

If fraud is suspected, your business should have clear and effective procedures in place to help stop the fraud and investigate the incident in as quick a time as possible. This is where your anti-fraud policy and procedures come in. Such a policy should also be supported by whistleblowing procedures, to encourage your employees to speak up if they suspect wrong doing, and a clear anti-bribery policy.

Help where you need it

As Governance experts, the team at Bridgehouse can assist your business with the creation of appropriate internal procedures, expenses policies, schemes of delegations, authorisation limits, verification procedures, audit trails and more. We can also review any current procedures in place to evaluate their effectiveness and suggest improvements or provide assurance to Boards that Internal Controls are working.

Call on Bridgehouse to draft or review your anti-fraud and related policies to ensure confidence in your ability to respond promptly and effectively to suspected incidents of fraud.

For more information and to get in touch click here.