DECREASE THE OPPORTUNITY
In many instances, employers simply rely
on audits or technology to detect fraud
after it has occurred, rather than proac-tively
addressing the opportunity. It is
much better to prevent fraud in the first
place. Anti-fraud controls and procedures
are the first step for any employer seeking
to decrease fraud risk. Employers have the
most control over the opportunity portion
of the Fraud Triangle and, therefore, can
create the most impact in fraud prevention
through managing opportunity for em-ployee
fraud.
There are a number of ways to decrease
opportunity. For example, mandatory
holidays will mean an employee in a finan-cially
sensitive position cannot maintain
exclusive control of books and records. In
a larger organization, the same can be ac-complished
with mandatory task rotation.
In addition, employers should consider
controls during hiring, such as appropriate
criminal or civil background checks, credit
checks or reference checks. These controls
are particularly important in accounting
and other financially sensitive roles, al-though
proper fraud controls should not
be limited to these types of employees.
GIVE YOUR EMPLOYEES SUPPORT
Personal pressures, such as financial hardships,
addictions and mental health
issues, are the motivation behind most
employment-related fraud. These pressures
are often external to the workplace, but
manifest themselves within the workplace
environment.
Employers should offer programs to
support and assist employees with the
management of these external pres-sures
to lower the risk of the employee
committing fraud. Employee assistance
programs, internal training programs and
careful monitoring by HR professionals
serve as important support tools to man-age
the various external pressures facing
employees.
SET THE RIGHT TONE
The message needs to come from the top of
the organization: this employer does not
tolerate fraud or theft. Management needs
to actively support and endorse anti-fraud
training, controls and audits to reinforce
this message. The employer should make
fraud awareness training part of its regular
employee-training program.
DETECTION
Even the best-planned and implement-ed
fraud prevention strategies will not
prevent all employee fraud. Therefore,
proactive employers must develop effective
policies and procedures to detect employee
fraud when it happens. HR professionals
can take an active role in two critical fraud
detection mechanisms:
CONSIDER A WHISTLEBLOWER LINE
Employees are often the first to notice
something out of place or concerning,
which leads to the discovery of a fraud.
feature
SECRECY, STEALTH AND SPEED ARE THE BEST
WEAPONS AVAILABLE TO AN EMPLOYER
FOLLOWING THE DISCOVERY OF FRAUD.
Photo by Mikute / Shutterstock
28 ❚ MAY/JUNE 2014 ❚ HR PROFESSIONAL