Suppliers are essential to providing companies with what they need to conduct business, however, they also pose their own set of fraud risks, arsing internally form staff – or externally. Staff could pose as legitimate or false suppliers. Even they could divert funds for their own use that was intended for a supplier.
Customers are important to the running of your business. They are your source of revenue. Meanwhile they can also pose a significant fraud risk. Most of your customers will come to your company in good faith to make a genuine purchase of products or services. Unfortunately there are other customers that will attempt to leave your business out of pocket.
Nearly 20% of business have been defrauded by an employee at some point during their trading history, causing significant loss and in some cases have destroyed a business. It is those on the inside of your company who can often do the most damage, due to their access to your key assets and familiarity with your processes (and how they might be bypassed). Your employees represent your businesses values and give it an identity. Their ethics and behaviours are a big part of your company’s reputation, so you need them to be honest and professional to protect your company’s name
If you are in the beginning stages of building your business, you are surely excited about getting to the point where you can start raising money from (potential) investors. Maybe you are already at this point in your company, and you would like to know how to succeed at raising capital. Since this is the most critical part of business development, it helps to know how to succeed in communicating with potential (potential) investors. After all, just because you have secured a meeting with a (potential) investor, it does not mean that you are guaranteed to receive their financial investment
Very few organizations actively audit for Fraud. Rather, their auditors are content to conduct financial, operational and compliance audits and to investigate Fraud only when symptoms are so egregious that fraud is suspected.
The five (5) ways to eliminate Fraud opportunities are: (1) having good internal controls; (2) discouraging collusion between employees and customers or vendors and clearly informing vendors and other outside contacts of your company’s policies against fraud; (3) monitoring employees and providing a hotline (whistle-blowing system) for anonymous tips; (4) creating an expectation of punishment; and (5) conducting proactive auditing.
Creating a culture of honesty, openness, and assistance includes three (3) factors: (1) hiring honest people and providing fraud awareness training; (2) creating a positive work environment, which means having a well-defined code of conduct, having an open-door policing, not operating on a crisis basis, and having a low-fraud atmosphere; and (3) providing an employee assistance program that helps employees deal with personal pressures.
The Serious Fraud Investigation Office (SFIO), headed by Bas A.S. van Leeuwen (LL.M., Esq.), attorney at law and forensic auditor, is the specialist investigating and litigating unit tackling the top level of serious or complex fraud, bribery and corruption.
Most organizations do not have a comprehensive approach to preventing and deterring Fraud. In fact, most companies don’t think about fraud until they experience one. When fraud occurs, they go into crisis mode, investigate and try to resolve the fraud, and then wait until another fraud occurs. A more comprehensive fraud-fighting approach would involve: creating the right kind of modeling and tone at the top, educating and training employees about fraud, assessing risks and putting proper controls in place, having reporting and monitoring systems in place, proactively auditing for fraud and then, when fraud does occur, investigating and following up
People typically become involved in already existing fraud schemes as a result of power that is exercised on them by another individual. The five (5) separate types of power include: reward, coercive, expert, legitimate and referent. It is through either one or a combination of several types of power that a potential fraud perpetrator is influenced to become involved in a fraudulent scheme. Reward power is the ability of a fraud perpetrator to convince a potential victim that he or she will receive a benefit through participation in the fraud scheme. Coercive power is the ability of a fraud perpetrator