Fraud Prevention and Management

Fraud Prevention and Management Recommendations

CRJ 334 Z-1 Summer 2009

Fraud Prevention & Management Recommendations

Frauds can damage a company’s financial health as well as its reputation. In order to resolve fraud issues, effort from six different areas will be required.

Top Management

One of the major roles of upper management is being a good role model. The top levels of the company should not think that they are exempt from the rules that they place upon the lower level staff. “Lead by example” should be their mantra. If lower level employees learn of fraud committed by a superior, the chances of the lower level employees committing fraud increase. However, if the proper example is shown, an honest tone is set and the risk decreases (Albrecht, et al., 2009).

Since personal pressures play a strong influence in fraud, upper management should have an Employee Assistance Program in place. These programs can assist any employee with a whole host of personal issues that could cause one to commit fraud (Albrecht, et al., 2009). .

Middle Management

Middle management also has to maintain the same level of ethical behavior and leadership as upper management, with the added responsibility of adhering to internal controls. Middle management will want to hire employees who exhibit ethical tendencies. This consists of thorough interviewing and background checking. Interviewers should ask all appropriate (and legal) questions to allow the hiring parties to make a sound decision. They should also check out all references provided (Albrecht, et al., 2009).

Middle management will should make sure that they follow all internal control procedures to let those unethical few know that their actions are being monitored. These controls should be regarded in a positive manner by middle management so as to maintain a positive working environment. If the supervisors and management show disdain or override controls, staff will exhibit the same...