Fraud deterrence (#34)
/In this episode we discuss the issues relating to fraud deterrence, to keep instances of fraud from ever happening. Key points made in the podcast are:
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Fraud deterrence involves conditions and procedures analysis to keep fraud from taking place.
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Could include the use of detection systems to spot fraud before it worsens.
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The cost of fraud deterrence is a fraction of the cost of the fraud being prevented.
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It avoids the loss of business reputation by a business, which might otherwise impact its contracts and loans.
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A robust, bottom-up budget is a good fraud deterrence control.
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Just the act of reviewing accounts is a deterrent, since employees see that you are looking over their shoulders.
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The worst frauds tend to go on for an extremely long time, building in size as they get older.
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It is rare to see an excessive level of control in a business.
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Focus on all aspects of the business when engaged in fraud deterrence.
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Conduct an operational review to identify control issues and also increase the efficiency level. Requires lots of interviews.
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Difficult to do an in-house fraud deterrence review, due to the fear of recrimination.
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Should do deterrence reviews about every two to three years.