• First Reference
  • About us
  • Contact us
  • Blog Signup 📨

First Reference Talks

Discussions on Human Resources, Employment Law, Payroll and Internal Controls

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies
You are here: Home / Business / Laws not enough to stop fraud

By Adam Gorley | 2 Minutes Read December 5, 2011

Laws not enough to stop fraud

Does this worry you:

Business losses due to fraud increased 20% in the last 12 months, from $1.4 million to $1.7 million per billion dollars of sales. … 88% of the respondents reported being victims of corporate fraud over the past 12 months.

Those numbers are from a survey from the United States, and business people there sure don’t sound too confident in the system designed to prevent fraud. Does this matter here? Almost certainly. Without strong internal fraud-prevention controls and oversight, a legal framework alone cannot prevent fraud.

Moreover:

Aside from various forms of embezzlement and outright theft, and the growing risk of information theft (think hackers), two other kinds of corporate malfeasance have come to the fore in recent years: fraud in the business model and fraud in the business process. …

The most likely targets by industry are financial services, media, technology, manufacturing, and health care. Small and midsize companies are also more vulnerable. “Many of these organizations typically rely on a small accounting department, especially in today’s economy,” says [fraud consultant Steve] Pedneault. They simply don’t have the resources to catch fraudsters.

So try this:

  1. Start at the top.
  2. Educate employees.
  3. Change the culture ASAP.
  4. Surprise! We’re having an audit.
  5. Check (and double-check) employee backgrounds.
  6. Prepare a data-breach response plan.
  7. Make sure the board of directors plays its role.

No one should be surprised that these are just good, smart internal controls.

Read Laton McCartney in CFO Magazine for details.

Adam Gorley
First Reference Internal Controls, Human Resources and Compliance Editor

  • About
  • Latest Posts
Follow me
Adam Gorley
Editor at First Reference Inc.
Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more.
Follow me
Latest posts by Adam Gorley (see all)
  • Can you implement a mandatory vaccine policy or ask employees if they have been vaccinated? - June 10, 2021
  • Do you know the latest on terminations? Find out at the Ontario Virtual Employment Law Conference - May 11, 2021
  • Announcing the 2021 Virtual Ontario Employment Law Conference - April 15, 2021

Article by Adam Gorley / Business, Finance and Accounting, Privacy / business fraud, corporate malfeasance, embezzlement, fraud, fraud-prevention controls, information theft, preventing fraud, risk management

Share with a friend or colleague

Get the Latest Posts in your Inbox for Free!

About Adam Gorley

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more.

Footer

About us

Established in 1995, First Reference is the leading publisher of up to date, practical and authoritative HR compliance and policy databases that are essential to ensure organizations meet their due diligence and duty of care requirements.

First Reference Talks

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies

Main Menu

  • About First Reference
  • Resources
  • Contact us
  • 1 800 750 8175

Stay Connected

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

We welcome your comments on our blog articles. However, we do not respond to specific legal questions in this space.
We do not provide any form of legal advice or legal opinion. Please consult a lawyer in your jurisdiction or try one of our products.


Copyright © 2009 - 2022 · First Reference Inc. · All Rights Reserved
Legal and Copyright Notices · Publisher's Disclaimer · Privacy Policy · Accessibility Policy