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Introduction
Fraud is a common problem in any organization and involves both the management and the employees. Therefore, there is a need for every company to come up with a comprehensive fraud prevention program. However, it is very hard to prevent fraud without first addressing the management or authority. Fraud prevention only becomes practicable when there is good management that provides good incentives to anyone who sees fraudulent activity to speak out or not to engage in it (Sullivan, 2005). Therefore, company management should come up with regulations and rules coupled with better incentives for the fraud prevention program to be a success.
The first and most crucial aspect of the fraud prevention program is to create a culture of honesty and high ethics within the company. Most companies that have established corporate ethics and compliance program have recorded a tremendous reduction in the risk of fraud. One example of these companies is Microsoft which formed a unit to look into its financial integrity (Biegelman, 2008). The recommendation was to hire employees who understood the social mores and culture of the country they were operating in, the employees were given the mandate of providing anti-fraud education to both the management and staff. Through this campaign, the company was able to create a culture of compliance that enhanced internal control and come up with a successful fraud prevention program.
Recommendation
On the same note, fraud management does not only involve enforcing harsh rules but it’s more of creating an organizational culture. Having an organizational culture that entails honesty, openness, and assistance has proved to work well with most companies that have established a fraud prevention program. Furthermore, it involves creating a conducive working environment, employee assistance, and training, setting clear codes of ethics within the organization, internal control, providing the highest degree of confidentiality to any employee who speaks out, and stating clearly the punishment of the crime (MBUYA, 2010).
It should be noted that all the above features of organizational culture should be adhered to for a company to have a formidable fraud prevention program. A case of real fraud crime was that of the Custer Battles which was found guilty of fraudulently billing the government and was banned. However, due to lack of proper punishment and follow up the directors went ahead to open another company and were still awarded the same contracts.
Therefore, for the company to be able to establish a culture of openness, honesty, and assistance various steps have to be followed (Albrecht, Williams, & Wernz, 1995). First of all the company should create a culture of hiring honest employees and to achieve this all current employees should be vetted to verify that all the information in their application and resume are correct, and the same should apply to recruits. Furthermore, the company should have highly trained management to conduct skillful interviews.
Conclusion
Honesty, openness, and assistance are also brought up by better working conditions. Therefore, to achieve this there must be clear, easy to read to readily available expectations on honesty and code of conduct within the organization. Engage the employees in assistance programs such as counseling, coaching, team building, and critical incidence response. Additionally, give better pay and recognition on job performance to the employees. Based on various companies that have given the incentive that enhance a culture of honesty, openness, and assistance it has shown that it exists and very effective in curbing fraud (Kallinowsky, 2007). Glaxo SmithKline is one major company that enforced organization culture in curbing fraud and the results have been very positive.
References
Albrecht, S. W., Williams, T. L., & Wernz, G. W. (1995). Fraud: bringing light to the dark side of business. Illinois: Irwin Professional Pub.
Biegelman, M. (2008). Building a Robust Fraud Prevention Program. (F. Magazine, Interviewer).
Kallinowsky, E. (2007). Business Fighting Corruption: Experiences From Africa. Web.
MBUYA, J. C. (2010). Proactive Fraud Management Guide. Saarbrücken: Lambert Academic Publishing.
Sullivan, G. W. (2005). Guide to Developing and Implementing Fraud Prevention Programs. Web.
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