(Available also for Customised Training by Duration, Venue & Fee)
What Fraud Is and What It Is Not
• Legal definition
• What behaviours are unacceptable
• Errors and abuse.
• The fraud-triangle theory
- sufficient pressure
- adequate opportunity
- ability to rationalize a dishonest act
• Dispel what a fraud perpetrator looks like
- age groups
- income levels
- both genders.
How Fraud Hurts the Organization
• Lost resources
• Decreased productivity
• Investments of time and money into investigation
• A hit to the company’s reputation
• Distorted company goals through financial engineering
• Lowered employee morale.
How Fraud Hurts Employees
• Increased employee scrutiny
• Decreased trust throughout the organization
• Possibility of decreased salaries
• Possibility of loss of bonuses
• Possible layoffs
• Need to clean up after any mess created.
How to Identify Fraud
• Financial/Transactional Red Flags
- red flags regarding the structure of or personnel involved in a transaction
- red flags within the organization’s operations
- red flags within the accounting system
- red flags regarding the organization’s financial performance
Behavioral Red Flags
- living beyond their means
- financial difficulties
- unwilling to share duties
- unusually close relationship with vendor/customer
- wheeler/dealer attitude
- addiction problems
- unwilling to take vacation days
- constant complaints about inadequate pay
- complaints about lack of authority.
How to Report Fraud
• Most frauds uncovered by whistle blowing
Punishments for Fraudulent Acts
• Spelled out explicitly to all in advance
• Addressed with certainty, swiftness, and severity.