Professional Documents
Culture Documents
Preventing Fraud
CHAPTER 4
Learning Objectives
1. Understand how to create a culture of
honesty, openness, and assistance
2. Know how to eliminate opportunities
for fraud
3. Identify the importance of good
internal controls
4. Discourage collusion between
employees and outside parties
Learning Objectives
5. Inform outside vendors of company
policies
6. Recognize how to monitor employees
7. Set up a response line for anonymous
tips
8. Conduct proactive fraud auditing
9. Create an effective organization to
minimize fraud
What Does the Phrase Not
Everyone Is Honest Mean?
71% 29%
Committed by Individuals Collusion
Explain the
Right to Audit
Clause
Discuss 7 Things that Can
Be Done to Eliminate Fraud
Discuss 7 Things that Can
Be Done to Eliminate Fraud
Toll-Free
48% 52% Hotlines
16%
Talk to
Managers
Dont Have 38% 17%
Have Hotline Talk to
Security
Hotline
29% Other
Why Do Whistle-Blowing
Systems Fail?
1. Lack of Anonymity The FEAR of
retribution
2. Culture Remember it is set by those at the
top of the organization, chastisement or
pattern of misconduct
3. Policies If it is not clear what is
acceptable conduct then reports wont be
made.
4. Lack of Awareness It must be
communicated effectively and reinforced.
Discuss 7 Things that Can
Be Done to Eliminate Fraud
2 4
Identify Fraud Investigate
Symptoms for Identified
Each Exposure Symptoms
Complete Fraud Prevention
Diagram.
Create Culture of Honesty, Eliminate Opportunities
Openness, & Assistance
(d) Implement
(6) Create an
Employee (7) Audit
Expectation of
Assistance Proactively
Punishment
Programs
Fraud
Investigation
Incident
1 2 Prevention
&
4 3 Audit
Resolution Action
Dealing with Fraud: The
Current Model. Another View
2 1. Fraud Incident
4. Resolution 2. Investigation
3. Action 2
How do Fraud Savvy Businesses
Minimize Fraud?
Investigation Tone at the
& Follow-up Top
1
6 2 Education
& Training
Proactive
Detection
5 3
Reporting & 4 Integrity
Risk &
Monitoring Controls
What Does Tone at the
Top Mean?
1. Developing & Promoting a
Company Code of Ethics