Fraud Risk Assessment

We are faced with the risk of falling for fraudulent activities almost on a daily basis.

I have always had a thing for controls and detecting things that are not too straight. Let me share a few things we need to know about fraud.

When someone cheats you or an organization, it’s fraud. Fraud is deliberate.

Every organization is susceptible to fraud. Every system. Every person. Once you drop your guards, chances are there is someone that could take advantage. For the purpose of this discourse, we would be dealing with money.

Why do people commit fraud? It’s surely not the devil! They are under pressure, they feel cheated, the environment enables them and they believe they can get away with it.

Can we eliminate fraud? Not likely but we can reduce it significantly. 

How? As an organization, leadership must set the right tone. Subordinates pay attention more to what their bosses do. Ensure open communication and let staff be aware that fraud is a No! No! Have clear policies and procedures, which should be adhered to. Enshrine job rotation, checks and balances. Ensure staff go on vacation and someone else does their work. Carry out a fraud risk assessment to determine areas in which fraud is likely to occur and take steps to either eliminate those risk if possible or reduce them to the nearest minimum.

Fraud committed by junior staff may be many but one committed by management staff would make all the others child’s play! Let’s know where to lay emphasis.