Financial Fraud are on the rise in the business world and all Organizations, whether big or small are susceptible to it. Frauds can negatively impact the reputation and goodwill of a firm. Online frauds are not the only channel for scammers and hackers to conduct their activities but, a business may face financial frauds in other forms as well including – Corporate Identity Fraud, Insider fraud, Cheque fraud etc. However, not all is lost. Businesses should be vigilant and always keep an eye out for details. They must be aware of loopholes in the control system of the organization, which may result in the possibility of a financial fraud. Thus, it is clear that businesses would like to take certain measures to prevent it from occurring. Certain steps Organizations can take to protect themselves from a financial fraud are as follows:
- Regular Internal review:
Conducting a thorough and detailed check of all documents including – company’s books of accounts, checking if payment receipt matches with the relevant invoices, documentation of records, employee records etc. will ensure prevention of financial fraud.
- External Auditing:
The company may choose to audit company books of accounts regularly through a third party or an external auditor in Dubai which will enable it to avoid any frauds and run their business operations smoothly. Doing so will ensure the company is well established and thus improve its image and brand name in order to attract potential clients. Depending upon the size of the company, it is required to conduct an external audit by law. Thus, it is better to establish external audit procedures earlier in the business so as to ensure ease in compliance with the law.
- Getting well-acquainted with the Suppliers, Clients and Employees:
The organization must ensure to get well acquainted with the suppliers, clients and company employees. They must stay in regular touch with them via not only email but other means of communication. This will enable the company to identify in advance how to deal with and conduct its operations with the potential suppliers and clients. In the case of employees, the company must ensure to conduct necessary background checks during the hiring stage and screen out those employees that may have been a part of fraudulent activities in the past.
- Curbing Corporate Identity Fraud:
A Corporate Identity Fraud may occur when a scammer obtains company information illegally and uses it to obtain money or other benefits from others. The scammer may obtain the information via emails, phone calls, websites etc.
The organization must ensure to protect their identity at all times by –
- Securely discarding all confidential company documents like letter heads, bank details, invoices, private business documents etc.
- Deleting unwanted files, folders and data from computer systems if not being used.
- Cancel an employee’s access to all computer systems, mobile phone or company provided devices when they exit the company premises and when they leave the company permanently as well.
- Avoiding disclosing bank details on company website or social media handles.
- Periodic review of registered company details and subscribing to services provided by government agencies in order to secure the company
- Getting Insurance:
The organization must ensure to get insured in case an unforeseen event or work place hazards occur. If all confidential and important documents were to get damaged in the unfortunate event of a fire or a natural calamity, the company must make sure to obtain relevant insurance. Losses related to crime and fraud are usually not covered by property insurance policies, thus it is important for business to safeguard monetary losses against these frauds. “Fidelity Insurance” is one which protects businesses against criminal acts such as robbery, embezzlement, counterfeiting and credit card fraud. Liability covered by this type of insurance usually includes coverage for loss of money (robbery or theft) and employee dishonesty (embezzlement and counterfeiting).
The company and its employees are the first deterrent against corporate financial fraud. A strong security system along with employee education regarding cautionary precautions to be taken in the case of a possible fraud, are of utmost importance in safeguarding the business, its employees and all parties related to it. It is always better to take necessary precautions in order to prevent a financial fraud from occurring rather than avoiding to take responsibility and shifting the blame onto the upper management. Precautions can be taken from an individual level as an employee of the company as well.
Contact Hallmark Auditors Today to know more!
