Insights: Article

Setting Up A Fraud Prevention Program

By Doug Cash

August 06, 2018

Can It Really Be That Hard?
The answer to this age-old question is no, it’s not. Setting up a fraud prevention program begins with understanding that any organization is susceptible to fraud and realizing the greatest threat to any organization is its own employees. Under the right circumstances, any employee could cross the line and begin manipulating their job duties for their own benefit. 

A true fraud prevention program is intended to safeguard the organization and its assets. One major asset of any organization is its own employees, and it’s important to protect them from being accused of things they haven’t done. This protection goes a long way in strengthening the bond between the employee and the organization. The following list can help with the establishment of a sound and useful fraud prevention program:

  • New employee background checks
  • Third party fraud hotline.
  • Written fraud policy.
  • Continued fraud training for all employees.
  • Complete review of all segregation of duties and job descriptions.
  • Surprise area inspections.

When establishing a fraud prevention program, the first step is getting employees to understand what is taking place, as well as the reasons behind the changes. However, this educational process is not as important as the “tone at the top.” Unless management commits to supporting a successful program that holds all employees accountable for their actions, no program can be sustained. Fraud prevention programs require accountability and continued review and improvement.

Keep in mind that an organization’s annual audit is not designed to identify potential fraud issues. Only an in-depth internal control examination (ICE) or a forensic accounting examination can do this. Since fraud protection programs are not included in a standard annual audit, it is important to get a forensic accountant involved to help you identify and mitigate your risk areas.

Eide Bailly can assist any organization with setting up their fraud prevention program. We also test current policies and procedures to see if opportunities exist for the system to be manipulated and/or exploited. These steps will allow your organization to avoid a much larger expense when fraud occurs.

If you have any questions about fraud prevention or would like to discuss your specific situation, contact your local Eide Bailly professional.

Latest Insights

January 2, 2019
A fraud scheme in a parts department offers a good example of why internal controls are so important.
December 11, 2018
Long-term employees sometimes don’t offer the security you think they do.
October 15, 2018
You have hired a good mergers and acquisitions (M&A) attorney, identified a business to invest in and you have chosen a company to perform your due diligence work. Everything seems to be on the right path … but, maybe not.
October 9, 2018
A nationwide white-collar crime registry, similar to the State of Utah’s registry, would assist in preventing financial crimes across the United States.
September 21, 2018
In the wake of Hurricane Florence and its footprint, devastating results are being experienced by communities and businesses. As a result of these catastrophes, businesses will turn to insurance carriers for recovery of covered losses. Current…
August 21, 2018
If you find yourself on the council, audit committee or government board, what can you do to proactively prevent fraud and protect yourself? Here are five fraud prevention tips to consider.
Find A Location