What can a firm do to prevent corporate fraud?--CICA

What can a firm do to prevent corporate fraud?

A NSWER
Budget cuts and reorganizations raise the pressure for individuals to
meet performance targets — and increase the risk of fraud. Here are a
few steps firms can take to help curtail corporate fraud:

Know who you hire. Contact references and verify the education of
potential hires. Conduct criminal and financial background checks on
those being considered for financially sensitive positions.

Take away temptation. Perform regular ethical and social hacking to
ensure Internet access and systems controls are secure.

Keep staff informed. Annual organization-wide ethics training delivers
a consistent message. A strong ethical environment encourages
self-policing.

Establish detection mechanisms. A combination of internal audits,
surprise audits and senior management reviews will ensure the right
questions are being asked at every level. This over-sight should
extend to remote locations.

Implement checks and balances. While most fraud occurs in
nonmanagement ranks, fraud by executives is often more costly. Create
an advisory committee to provide oversight at all levels.

Set up an anonymous hotline to report fraud. When a call comes in, act
quickly to confirm its validity.

Take action. If fraud is detected, implement a rapid-response plan for
investigating, reporting and prosecuting misconduct, fraud or
corruption. Follow-up procedures ensure questionable behaviour is not
overlooked. Then put controls in place to prevent this type of fraud
from happening again.