Internal fraud is a significant problem faced by organizations in all industries, no matter the location. It is responsible for billions of dollars in losses annually. Ensuring prevention first and then detection is critical for companies that want to minimize losses. Companies must consider where and how fraud is committed before developing a strategy to combat it.
Employees rarely take jobs to commit fraud. However, the intention behind the fraud does not make it less harmful. Employees can become involved in fraud for any number of reasons. But evidence shows that the lack of fraud prevention and detection mechanisms gives rise to increased amounts of wrongdoing.
What is also clear is that having one or two types of fraud prevention or detection methods is not enough. Companies must be strategic in their use of these efforts. However, there is also clear evidence about what types of fraud prevention methods can be most effective. In particular, providing hotlines to allow staff members to inform superiors about potential fraud is incredibly effective. Both voice and internet based hotlines are powerful. Moreover, security assessments are necessary for just about every single organization. Without such assessments, understanding potential vulnerabilities is nearly impossible.
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