Fraud Management Principle
Fraud Management Principle
Fraud Management Principle
It is important to have a responsible person with adequate resources and access to top
management running the program. This person should be charged with designing and evaluating
the program, and for communicating it throughout the organization as appropriate. Since
organizations vary greatly in complexity, inherent risk, and size, there is no one-size-fits-all
program, but all programs will address issues such as:
3. Fraud Prevention
Preventing fraud is far preferable to detecting it after the fact. In practice, the same systems and
controls established to prevent fraud may help in detecting it (e.g., segregation of duties for a
certain procedure may help boost the chances that someone will be in place to report potential
fraud).
4. Fraud Detection
Controls, monitoring, and reporting promote faster detection of fraud. Key detection measures
include a whistleblower policy, reports designed to highlight potential and common indicators of
non-standard outcomes over time, and other controls that alert people to potential fraud. It goes
without saying that installing these indicators will have no effect if they are not monitored.
Fraud can be taken down a notch, even if it cannot be completely eliminated. A systematic
program following these five principles is the place to start.