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Creating an anti-fraud culture #1

Welcome to our new 5-part blog series, focused on the white paper written by Dave Verma, Corporate Fraud Investigator, “Principles of Procurement Fraud Prevention”, where there were five critical principles outlined for fraud prevention.

Creating an Anti-Fraud Culture

As part of the white paper called “Principles of Procurement Fraud Prevention”, there were five critical principles outlined for fraud prevention. These were creating an anti-fraud culture, creating a due diligence culture, defending against social engineering, leveraging information technology to increase protection and investigating and assessing risk levels and current controls.

As a result, we have created five blogs, which will outline and explain the key concepts highlighted in the white paper. This is the first blog of the five and will discuss the importance of creating an anti-fraud culture to help prevent fraud.

What is Anti-Fraud Culture?

If we look at the term “anti-fraud culture”, we can see that it has had a long history as being a catchphrase that makes reference to the intentions of senior leadership, which are often admittedly good intentions, to prevent fraud from taking place. However, the reality of many fraud protection measures doesn’t conform to policy statements.

The Association of Certified Fraud Examiners (ACFE) believes that addressed fraud can cost the typical corporation 5% of total revenue, with the average loss per case totalling $1,783,000. Furthermore, there can be massive damage to the reputation of the business if fraud is reported to the public.

How Do We Create An Anti-Fraud Culture? 

There are several things that can be done to create an anti-fraud culture within the workplace. These ideas can all be implemented simultaneously

For example, training is a good idea, especially if you make it mandatory for all staff members; providing general training for whistleblowing is a good example, as the whole staff can then take part in a larger program of organisational ethics training.

It’s also a good idea to incorporate accountability by making anti-fraud duties a key part of most job roles. If we directly make staff responsible for anti-fraud measures, then we can successfully introduce a culture where anti-fraud measures are standard.

It’s also important to consider that one person’s definition of knowing what constitutes fraud is much different from actually doing something about it. Creating a uniform set of principles surrounding fraud and training staff on them means that everybody knows what to do.

Any policy that is created for the sake of dealing with fraud has to start at the top and work down. Staff will be less inclined to take fraud prevention seriously if it’s clear that the senior members of a company don’t consider it to be important. It’s definitely a subject where leading by example is best.

Final Thoughts

Creating an anti-fraud culture is a core part of fraud prevention and is composed of training and accountability. This is just one of the five blogs we will be producing on the subject, so check out the other four blogs to discover more about fraud prevention. A robust fraud prevention system is contingent on several factors, so it is important to have a firm understanding of each of the principles outlined within the white paper.

Would you like to learn more about identifying and preventing fraud in P2P?

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