With fraud costing as much as 5 percent of revenues worldwide, the Association of Certified Fraud Examiners is recommending a set of steps for businesses to take to protect themselves.
“Losing 5 percent or more of revenues to fraud can be devastating,” said ACFE president and CEO James Ratley, CFE, in a statement. “For many companies, doing a better job of preventing and detecting this type of crime can be a matter of survival in a difficult economy.”
The ACFE recommends that organizations should:
1. Assess their fraud risk. Control weaknesses and vulnerabilities to fraud vary from entity to entity, so each needs to determine how well-protected or not they are against fraud. The ACFE offers a Fraud Prevention Check Up to help.
2. Adopt an employee code of ethics. Management can help set the tone at the top by drafting and promulgating a clear, concise set of compliance standards that apply to everyone, and that everyone was read and sign.
3. Establish hiring procedures. Formal employment guidelines can help, and new employees should be subject to thorough background investigations. Once they’re hired, they should also be evaluated on their compliance with ethics and anti-fraud programs as part of their regular performance reviews.
“For most organizations, the new year is a time for objective-setting and prioritizing goals for the months ahead,” Ratley said. “Preventing and detecting more fraud in 2014 should be at the top of this list.”
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