Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 4: preventing fraud - Coggle Diagram
Chapter 4: preventing fraud
Creating culture of
Honesty
having good corporate code
conveying those expectations
Openness
open door/easy access policies
Assistance
positive personnel
operating procedures
How to?
Hiring honest people
Verify all information on the applicant's resume/application
Require all applicants to certify information inc are accurate
Train those involve in interview session to conduct interview skillfull.
Create a positive work environment
Code of Conduct
Open-door Policy
Not operate on a Crisis Basis
Low-Fraud Atmosphere
make company less vulnerable to fraud
Provide Employee Assistance Program (EAP)
help employees deal with
substance abuse
Gambling
Money management
Health, family and personal problems
Provide support system with program like:
Team building
Coaching
Assessment
Counseling
Conflict resolution
Eliminate opportunities for fraud to occur
Having good internal control
Control activities
Segregation of duties
2 ppl do a task together / splitting the tasks - no one will handling completed task
Authorizations
Only authorized person have permission to authorized to completed certain parts
Physical controls
physical safeguards (lock/key) - warehouse
Independent checks
job rotation/mandatory vacations, audit
Documentation
document that record all the evidence and audit trail as reference
Discourage collusion (employees+customer/vendors)
Periodic letter
- explain policies to vendors
right to audit
clause on all purchase invoices
Monitor employees by
providing hotline
for anonymous tips
close monitoring
initiate early detection
motivates potential perpetrators to not fraud because them got watched
whistle blower
to report any suspicious activities
elements
Anonymity
Accessibility
Independence
Follow up
Create expectation of
punishment
Fear of punishment
Termination
disclose bad behavior to family/friends
Prosecution
Provide
proactive auditing
Identify fraud risk exposure
Identify fraud symptom
Build audit program
Investigate fraud symptoms identified
Current model
Dealing using 4 stages then no futher action is taken, therefore this method not effective
Elements of Fraud-Fighting Model
Positive tone at top
leaders/manager should show good behavior
Educate & trained employees
why fraud is serious
action will be taken if fraud is suspected
Integrity assessing risk and having a good internal control
Report and monitoring system
Proactive fraud detection method
Effective investigation and follow up action when fraud occurs