Fraud is more of a reality in business than most company leaders want to admit. Ignoring the risks it creates only increases the risk. And, if not addressed, the negative results can be embarrassing at best and devastating at worst.
Waiting until something bad happens and responding is not the best way to address fraud-related risk. Asking key questions to make sure safeguards and protections are in place is the right approach. Unfortunately, many, if not most, companies do not have appropriate anti-fraud measures in place.
Interestingly, the reason to address fraud correctly has a much more positive side to it than just avoiding risk. Strong fraud protection helps increase confidence of investors, regulators, audit committees and other key audiences of significance to your company.
There is a thorough process to go through in consider what fraud risks might exist for your firm. Far more thorough than can be explained or addressed in one blog post. But, some questions that would be valuable to consider in starting to address fraud risk might include:
Has your company:
- Established a process for oversight of fraud risks by the board of directors or other key leaders?
- Implemented an ongoing process for regular identification of the significant fraud risks to which your company is exposed?
- Identified and approved its tolerance for different types of fraud?
- Identified and approved a policy for how it will manage fraud risk?
- Implemented steps at the process level specifically intended to prevent, expose or eliminate fraud risks you have identified?
- Initiated an internal program that promotes and affirms ethical behavior and facilitates communication on sensitive issues?
Fraud can be very expensive. That expense can come in real dollars, or lost productivity, or loss of reputation and standing with key audiences and markets. Doing an internal check-up will take some time and investment if it is going to be done so that it has real value. But, that investment of time and money is a fraction of what the cost would be if real fraud were to happen and bring with it all of its negative experiences.
Certainly having thorough accounting practices and support in place are part of the equation to address fraud. Price CPAs may be able to provide some expertise and experience to help your company correctly address fraud risk. Contact us today to arrange an appointment to further explore this critically important topic.