by Nick Groen
21. November 2011 08:41
By: Lisa Papas CPA/CFE
Most companies will have to deal with fraud in their organization at some point. It is impossible to prevent all fraud but there are steps that can be taken to try limit the occurrence of fraud.
When discussing fraud the starting point is looking at the fraud triangle:
Pressure
Rationalization Opportunity
As you review the triangle you can observe that only one of the three factors can be managed – eliminate the opportunity. So how does a company eliminate the opportunity?
I wish that was an easy question but its not.
The first thing a company should do is try to deter and prevent. To do this it is important that management is vigilant. In an ideal world you would review every transaction and entry made in your company. As we all know that is impossible for most companies. It is important to set a tone in your business. Every company should have a code of conduct and written policies that are followed by everyone in the corporation. A positive work environment and non-compliance penalties will assist in the prevention. The most important thing a company can do is make sure they have strong internal controls and a good segregation of duties.