5 Fraud Tips Every Business Leader Should Act On

Organisations around the world lose an estimated 5% of their annual revenue to fraud, according to the ACFE’s 2014 Report to the Nations on Occupational Fraud and Abuse.

The good news? There are some basic fraud tips and steps your organisation can take immediately to lessen your vulnerability to fraud:

  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.

  1. Establish Hiring Procedures

When hiring staff, conduct thorough background investigations. Check education, credit and employment history (as permitted by law), as well as references.

  1. Train Employees in Fraud Prevention

Do workers know the warning signs of fraud? Ensure that staff members know basic fraud prevention techniques.

  1. Implement a Fraud Hotline

Tips are constantly the most common detection method for cases of occupational fraud by a significant margin according to the ACFE Report to the Nations 2014 Global Fraud Survey.

Occupational Fraud Detection Bard Graph


Recent research shows that 5 times more fraud and illegal activity is exposed by hotlines rather than by internal audits. It also shows that people who work in businesses or closely associated with businesses are becoming more and more conscious that illegal type of behaviour is unacceptable. Having a hotline in place gives people the ability to be able to anonymously report any irregularities in businesses.


Promoting Ethics & Honesty in organisations globally

  1. Increase Awareness

Communicate regularly to staff about anti-fraud policies, ways to report suspicions of misconduct and the potential consequences (including termination and prosecution) of fraudulent behaviour. Create a culture of awareness with your whistleblowing system by implementing and reinforcing of the protected disclosure concept thereby including all employees in the crime-fighting fold.

A service provided such as Whistle Blowers (Pty) Ltd presents to all employees at subscribing sites, educating them on the ultimate benefits to the company and employees of rooting out criminal elements in the workplace.

Whistle Blowers also makes presentations to labour unions involved in order to gain their support of the concept.

International Fraud Awareness Week takes place every year during the third week of November. It encourages business leaders and employees to be proactive and take steps in minimising the impact of fraud by promoting anti-fraud awareness and education.


One Comment

Gravatar Icon Sharon Johnson

Thanks for posting your advice for Leaders to create an environment of truth and ethical behavior. I agree with your concepts and believe that organizations can create positive, hardworking teams, if they are clear about their ethical practices and policies in the workplace. In my organization, the values are posted and shared with all new hires during their orientation. New hires are provided electronic copies of the Code of Conduct and Ethical Behavior policies, which they need to sign with an electronic signature. Once a year, employees are required to read the policies and acknowledge that they understand and will comply with all the provisions of the policies.
If organizations continue to practice these types of procedures, they will have great team players and no need for whistleblowing. The difference between team players and a whistleblower is team players are content to work on a team where ethics and the truth are regular business. A whistleblower is someone who discovers unethical behavior. If we promote good ethics and practice them, there is no risk of whistleblowing. The two will never be the same.