The end of the year is fast approaching and organizations like yours are already in the final steps for planning out activities for 2016, but aren’t you forgetting anything?
This time of the year is the best in figuring what fraud prevention measures you will be implementing for the coming year as well as bearing in mind the importance of such measures.
Numbers Are NOT In Your Favour!
The ACFE’s 2014 Report to the Nations shows that 58% of organizations that has been victimized by fraud never got to recover their losses. Think about that and you’ll soon see how important it is to exercise due caution by making sure that you mitigate your fraud risk as much as you can. Of course it is our hope that you’ve been already doing this but hey, better start now than regret not doing so later, right?
“What can I do to prevent fraud in my organization?”
The above is perhaps one of the most common questions we receive from our corporate clients throughout the year. We do wish that we have just one all-encompassing answer but honestly, being able to prevent fraud completely is next to impossible and there is no real guarantee or assurance that fraud will never occur. All we and you can do is to try to manage and mitigate fraud risks. We’ve tried doing that by publishing numerous fraud awareness and fraud prevention articles to help organization leaders like you but alas, that is all we can until you contact us to dig in deeper.
The Most Effective Anti-Fraud Control
The Report to the Nations published some information pointing to proactive data analysis and data monitoring as the most effective anti-fraud control. The keyword there is you have to be proactive. You see, cases wherein control was present reports that there is a 50% decrease in median duration and a 59.7% reduction in median loss compared to cases where there was no control. An interesting fact is that while this control has been proven in the report as the most effective, it is not even close to being the most common control. Only a third of the submitted cases are sporting this.
Surprise audits is another one of the most effective controls for deterring fraud. This showed a 50% decrease in median duration and a 43.3% reduction in median loss but just like the first one, this is only present in just about a third of all the cases in the study.
You might be surprised to know that hotlines are among the top controls for fraud prevention. It showed a 50% decrease in median duration and a 40.5% reduction in median loss It just shows that since hotlines are the channel for tip-reporting, also known as the most common method of fraud detection, the anonymity and security provided by this type of fraud reporting does pay off.
As this year comes to a close, we sincerely hope that your organization will not be one of those companies who’ve waited until a fraud gets discovered before contacting us and contemplating about implementing some fraud prevention measures. Take this time of the year to reflect on what controls you have in place and what you may consider adding to help reduce fraud in your organization. Here’s to more success in 2016!