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 steps your organisation can take immediately to lessen your vulnerability to fraud:
- 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.
- Establish Hiring Procedures
When hiring staff, conduct thorough background investigations. Check education, credit and employment history (as permitted by law), as well as references.
- Train Employees in Fraud Prevention
Do workers know the warning signs of fraud? Ensure that staff members know basic fraud prevention techniques.
- 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.
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
- 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.