Fraud Author Tracy Coenen

Eliminating Opportunities
Perpetrators of fraud have plenty of schemes to choose from when cooking up their crimes. The fraud schemes range from petty theft by lower-level employees, all the way up to management cooking up stellar financial statements to dupe investors and lenders.

Fraud prevention policies and procedures sometimes have a tendency to focus on the smaller thefts. While those types of defalcations occur most often, they are not the most expensive. The financial statement frauds are the most devastating monetarily, and therefore must be fought aggressively.

Another mistake made by companies attempting to begin proactive fraud prevention is an “all or nothing” attitude. While the best fraud prevention programs are extensive in terms of procedures, costs, and timelines, this should not deter companies from implementing basic procedures. Even if a company cannot implement a comprehensive fraud prevention program due to cost or staff limitations, management should still make some basic improvements.

Companies must take steps to aggressively prevent fraud, and must eliminate policies and procedures that may encourage fraud. Legal counsel can be instrumental in identifying risky areas and helping to develop appropriate courses of action.