A Little Attention Eliminates Fraud

The number of frauds taking place against business is increasing day by day. This applies both to the increase in the number of fraudulent cases as well as the amount of money that is getting lost. One of the major aspects for the increasing number of frauds that take place today in business can be because of the bad economic conditions prevailing world over.

Risk of Fraud for Medium and Small Sized Business In Comparison to Large Business Setup

For small and medium sized businesses, the risk of vulnerability of fraud is even higher as they are more informal in their set up as compared to large business that has a more formal setup.

Frauds in Business

In order to detect fraud against business and set up proper procedures and policies to counter the same, one should first try to understand the frauds that are likely to take place in a business.

Becoming aware about the frauds occurring is business is very crucial to prevent oneself from becoming a victim of fraudulent practices.

A consumer being a victim of fraud is a common story often read and seen in Medias. However, in reality, businesses more often than consumers end up being victims of frauds.

Right from data being hacked by third parties to frauds in accounting by employees to deceptive returns from consumers, there are wide varieties of frauds that take place.

In fact, businesses are less protected than consumers are, as they are held and made accountable if caught in a scheme of fraud. A business cannot escape from its responsibility towards consumers, banks, insurance companies, shareholders, and creditors when a fraud takes place. 

How to Protect Business from Fraud

There are multitudes of ways available to deter fraud in a business. Awareness if created at the senior level of management will help to curb business frauds.

A strong message circulated throughout the organization that the management is keeping a tab on everybody and everything and if caught will be prosecuted both civilly and criminally is enough to curb frauds from taking place inside the organization.

Along with circulating a strong message, procedures in writing for developing internal uniformity and for indemnifying policies and practices should be adopted.

The following steps if adopted will help the business to reduce fraudulent occurrences from taking place:

* Ensuring anti-fraud practices are followed regularly to identify fraud practices
* Developing written procedures in crucial areas for dictating work process
* Division of key responsibilities and keeping constant checks and tabs

Ways to Detect and Protect Business from Fraud
*Anonymous Tip Box for Employees To Report

One of the time tested foolproof method to prevent frauds from taking place in the organization is by setting up an anonymous tip box for employees to report. Care should be taken to maintain anonymity of employees and to see that employees to settle their personal grudges or score do not use the process. This anonymous tip box method is an excellent way to reduce the financial losses occurring in the organization because of frauds by employees. 

* Regular internal and external audits along with intermittent surprise audits by employing external auditors will help to detect frauds taking place right at the initial stages.
* Defining policies with respect to the usage of internet, emails including storage devices such as laptops, mobiles and other devices will help in curbing the frauds of corporate data being stolen.

Executing a fraud-curbing plan entails dedication along with providing of appropriate tools and proper assistance to employees. A little attention at the right time aids in eliminating fraud by establishing complete control and that is the true secret for the success of a business.