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    Winter-2016  


HR Leaders Need To Increase Participation In The Company's Anti-Fraud Efforts

Workplace fraud is growing and impacts the bottomline of many companies, sometimes to disastrous effect.

HR Leaders need to become more proactive in identifying suspicious activities, starting with the hiring process.

According to Ron Steinkamp, principal in the Risk Advisory Services group of Brown Smith Wallace, a St. Louis-based accounting firm, Incentive, opportunity, and rationalization, the “Fraud Triangle,” are the three ingredients that set the foundation for fraud.

The industries most commonly victimized are banking/financial, manufacturing, and government and public administration, but any type of business is a potential target.  

Fraud schemes are endless and continually changing, which is why companies should create an environment that reduces their exposure to fraud.  This is where the HR leader has a significant role.

Companies must create an ethical culture, build antifraud programs and conduct regular assessments to mitigate the risk.

The best way to detect when and where fraud occurs is to create a fraud hotline through which employees, vendors and customers can anonymously report suspicions.

 Preventing fraud before it occurs involves implementing a formal company code of conduct that emphasizes prohibited behaviors and actions and outlines employees’ responsibilities in the prevention and detection of fraud. Additionally, a fraud prevention checkup can help indentify your company’s weak spots where fraud is more likely to occur.

A more detailed fraud risk assessment can identify the critical processes in which fraud could occur and the people who are in a position to commit it. Fraud monitoring uses data analytics to highlight red flags and potential errors, fraud, inefficient operations and other risks.

A formal fraud review/investigation is best directed by a Certified Fraud Examiner (CFE), who can conduct a thorough, independent, objective review and provide solutions. Don’t wait until you’re under water to stem the tide. Proactive measures can prevent fraud and, in the long run, will save your company money.

 


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