Building an anti-fraud environment is the best way to prevent it successfully. When fraud is committed, it is important to take immediate action to prevent future occurrences by discouraging additional attempts. One of the most powerful fraud deterrents is a good manager who is alert to the signs and actively works to discourage it. It is important to identify any control level deficiencies to determine how to remedy them, and business owners should remember that prevention is key to lowering the need for extensive fraud detection. Consider the following control ranges for improvement.
Physical Security Physical security is used for fraud prevention by monitoring the level of access to computer systems, documentation and assets to lower the chances of unauthorized use and damages. From checks to computer stations, assets can encompass a wide array of items. Access to assets should always be restricted, protected and limited to a small range of accountable individuals. Databases, bank accounts and all other sources of income or important information should be treated with care. To determine what needs to be the most protected, pinpoint all assets that are vital parts of the business’ operations.
One especially important aspect of this is computer systems. These systems should always be controlled tightly to protect data integrity and prevent misuse, and companies should keep the Data Protection Act in mind when devising a plan for protecting their computer systems. Threats to data systems can come from within the company or from hackers outside of it. In addition to this, the computer itself could possibly be stolen. It is important to back up information in a location away from the server or computer. Expensive computers containing a large amount of data or programs should be properly insured, because losing them can put a dent in a company’s income.
Responsibilities Groups and individuals within the company should be given a list of responsibilities, and they should be encouraged to work together to achieve common goals in the most efficient manner. Some important principles to keep in mind include the following:
– Clearly define each individual’s responsibilities for activities, resources, targets and objectives. This preventative measure should also include set authority levels with several checks and balances put in place to ensure accountability.
– Create clear lines of reporting with expansive commands that permit supervision. – Avoid relying only on one individual.
– Separate duties to keep abuse opportunities to a minimum. This preventative measure is key to ensuring certain processes are not carried out by only one person.
Supervising Managers must supervise workers properly to discourage fraud commission. There should be checks and balances in place that make managers accountable to one another and the business owner. Random checks are very useful tools, and they are crucial for both prevention and detection of fraud.
Audits This detection measure is a good way to deter people from committing fraud. Audit trails can ensure every transaction is traceable from the beginning to the end.
Monitoring It is important to regularly review company policies to alter them as needed for the most efficient monitoring system. Monitoring is crucial for both detection and prevention. Independent teams have been found to be even more effective than managers in completing this task.
It is also important to have a solid staff and to identify weaknesses in staffing. Budgets should always be implemented and used to pinpoint important limits. Also, there should always be supervision in the development of any new systems. To learn more, contact ACBI at 203-259-7580 or visit our website.
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