A lot of business owners tend to not have a clue about minimizing the possibility of fraud within their company or organization. That’s too bad, but we’re telling you that it’s time to make a change about that and it can be easy!
You see, by knowing what kind of risks your organization is facing, you’ll have a better chance of mitigating it. It will also give you more chances to increase revenue and reduce losses. Sounds good? Then read along below!
Here’s what you got to do…
First, You Need to Have a Risk Management Plan
A plan helps you keep focused and ensures that you’ll have something to hold yourself to. Studies indicate that a clearly laid out plan increased the possibility of success by a very significant percentage, so get your board together and prepare to talk this out with your team!
Next, You Have to Improve Your Plan
How so? Well, set the tone at the top.
You and your team of managers have the power to set what kind of culture you’ll have in your enterprise. How you act and behave shapes the behaviour and action of your people.
What we mean is, you can’t expect your people to play nicely if you’re a known fraudster, more so if they’ve witnessed you or your managers committing some very questionable things. Lead by example and you’ll see people will follow.
Then, Understand and Use the Fraud Triangle
What? What is this thing?
The Fraud Triangle describes the 3 main factors which has to be present for fraud to occur. Developed by Donald Cressey, it says that there has to be a person who’ll commit the fraud, reason or rationalization for doing so, and opportunities to commit it.
Okay, it’s not anything new, but what we can get from this is most frauds occur because of the availability of opportunity – that’s what we are trying to take out of the equation.
Smash Down the Silos
Independent parts of a company makes it easier to hide things and do things under the table. Break it and you’ll have less opportunities present for fraudsters to trick you.
Incorporate Risk Management in Your Business Processes
Risk management requires frequent and regular visits, just like tending a garden. There has to be checks on HR liabilities and compliance, 3rd party relationships, financial controls, and insurance. This works best when done at every level of your business and is integrated as a part of company culture.
Don’t Forget to Have Management Review of Your Process!
Make sure that there is nearly no oversight by reviewing the risk management process itself on a regular basis. Effective controls are only effective when done right, thereby you have to make sure that the measures you have in place are still appropriate.
And Lastly, Take Care of The Whistleblower
Hey, if someone reported the fraud to you, protect and help that person. Do not let him or her be the fall guy. Let him or her remain anonymous whilst you find out what’s going on or if there really is white-collar fraud being committed under your nose.
Remember, you wouldn’t have known there was anything fishy going on if not for the whistleblower. Make sure that potential and existing whistleblowers are given a safe and healthy way to let you know what’s going on. After all, we’ll need their help in conducting private investigation of the matter at hand.
Want more tips and tricks in identifying organizational fraud and screening new hires? Then follow this blog for the latest tidbits on and tips from the leading private investigator in Toronto! Questions are welcome, all you have to do is contact us and we’ll figure out what to do next.