Weekly Blog #9 - Preventing Fraud and Risk Management

Q: CEO ANC Inc

“It has been argued that the ‘culture of an organisation plays a large part in incidences of fraud, bribery and corruption, yet companies continue to ignore this and focus more on internal control measures only.”

I strongly agree with the above statement, internal fraud, bribery and corruption is greatly reduced when upper management establishes a proper ethical code of conduct valving integrity and encouraging open and honest communication (Australian Standard, 2008).  According to KPMG, surveys were conducted to measure employee satisfaction shows employees happy with their company culture environment as less likely to commit fraud (KPMG, 2011).

Today in my current workplace I am very grateful of my boss and how he treats all his employees.  He puts his employees first and really cares about us all.  This helps his employees to be satisfied with the culture of our workplace thus creating a real positive environment.  Because of this, us employees respect our management and perform our duties to the best we can each day. I believe creating a positive culture in your business is a win-win situation.  I would have to say positive culture itself would not prevent fraud from occurring but referring back to KPMG it will significantly reduce the risk of fraud, corruption and bribery from happening.  I can only hope wherever I work next after my degree has a similar culture. 

Organisations sink or swim based on their internal culture.  If they fail to produce a positive environment, the organisation may experience; Fraud, loss of faith and loss of revenue (KPMG Forensic, 2014).

To minimise this and to develop a positive fraud awareness culture I would strongly advise:

• Establish fraud control plans.
• Educate staff in relation to fraud processes and make sure they adapt them regularly.
• Provide a means for reporting fraud, eg ways to report fraud anonymously.
• Actively investigate instances that are reported.

Reference

Australian National Audit Office and KPMG. (2011, March). Fraud Control in Australian Government Entities.  Retrieved from: http://www.anao.gov.au/~/media/Files/Better%20Practice%20Guides/Fraud_Control_BPG.pdf

Australian Standard. (2008). AS8001-2008 Fraud and Corruption Control.Retrieved from:

           http://www.saiglobal.com/PDFTemp/Previews/OSH/AS/AS8000/8000/8001-2008.pdf

KPMG Forensic. (2014). Fraud Risk Management: Developing a Strategy for Prevention, Detection and Response.  Retrieved from:https://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Documents/fraud-risk-management-strategy-prevention-detection-response-v2.pdf

Additional Information

Fraud Risk Management - KPMG:

www.kpmg.com/cn/en/issuesandinsights/.../fraud-risk-management-o-200610.pdf

Managing the Business Risk of Fraud - ACFE:
https://www.acfe.com/uploadedfiles/acfe_website/.../managing-business-risk.pdf

Fraud Prevention, Detection and Deterrence:
https://www.youtube.com/watch?v=r7DWQZZkzxA

Best Practices for the Deterrence and Detection of Fraud:
https://www.youtube.com/watch?v=_SfoI4Ot8K8