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Friday, October 21, 2005

Fraud - Something Even Those You Trust Don't Tell You About

As I told you yesterday I attended a networking meeting where we heard a talk by Price Waterhouse Coopers.

The talk was on fraud.

I've seen fraud in action in several companies and I was impressed with the consultants down-to-earth approach and knowledge.

I particularly liked her summary of questions to ask yourself. Just so you can check whether you're about to be defrauded. So I asked her if I could see her summary.

She's kindly sent me the presentation and I'll set down the 6 questions she suggests:

  1. Is fraud treated as a business risk in my company?
  2. Do I know all the frauds that my business is exposed to in my industry?
  3. If I find fraud do I have a prepared consistent policy to deal with it?
  4. Does the staff know it is everyones responsibility to be aware of fraud: prevention and its detection?
  5. Have we a damage reduction plan prepared and ready to go if fraud is detected?
  6. Can the management information show fraudulent activity quickly?

Some of the signs to look out for if fraud is happening include:

  • A member of staff not taking long holidays or sick - because "people will muck up the system"
  • Costs going up but sales dipping
  • An employee living beyond their means
  • stock "shrinkage"
  • overly complex accounts reconciliations

So there you go. Are you prepared?

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