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Case: Designing a Robust Fraud Prevention Program

Here is an article on a fraud prevention program. Please read it and give your opinion. Make any comments you may have on its likely success.

(See attached file for case)

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Fraud in corporations is recorded in both public and, private sector but it is normally not publicized. The Association of American Fraud Examiners conducted research in 2004 and established that the most prevalent fraud detection methods used in corporate and non-governmental organisations alike are as follows:

1. Employees 51.7%
2. Customers 19.7%
3. Suppliers 15.7%
4. Anonymous 12.9%

Today many organizations deal with the problem internally. Accounts can be misrepresented and the information is usually internalized so that the donor is unaware of what is happening. In my opinion failure to include individuals with financial oversight on the Board of Directors makes any of the precautions solutions stated in the article such as "creating a positive environment" or " hiring certified fraud examiners" ineffective due to the loss of control on executives. Stopping fraud before it happens actually requires very strict controls over the employees including executives. Such prevention or awareness programs may have adverse effect. For example staff and board members might feel restricted in their actions due to a lack of autonomy and sense of ownership of the organization, so that levels of commitment and loyalties are diminished, ...

Solution Summary

The following posting analyzes an article regarding a fraud prevention program.