Effects Of Occupational Fraud

Discussions

The cost of occupational fraud both financially and to an organization’s reputation can be accurately damaging. No business organization is resistant from the severe damage that fraudulent activity can inflict. From large corporations to small businesses, fraud is universal and often results in disturbing consequences.

Fraud has the possible to mess up the activity of any business. In some extreme cases, fraud can discourage the survival of the business itself by limiting the confidence partners and clients have in it or by promoting doubt inside the workplace.

One of the famous downfall of a business related to fraud is the Enron Corporation; a company that reached dramatic heights, only to face a remarkable collapse. The story

The simplest example is that in which employees are intrusive with the normal flow of money in a way that makes it less obvious for the business owner. With businesses getting more and more intricate, it is harder to track down where each cent goes and bad faith lures everyone at a given moment.

A company dealing with fraud will make investors and business partners hesitant to transact in the organization. Of course, no one wants to deal with the organization having a bad record and you cannot trust. Brand loyalty might stop or slow down the process but if we are talking about serious and repeated fraud, there is close to nothing you can do.

Fraud affects morale inside the company and can disrupt the normal momentum of the organization. If employees discover the one behind the fraud, the rest will feel bad. This will create bad harmony and disrupt the growth and stability of the organization. On the other hand, fraud discovered at the management level can have devastating effects on the morale of whole

It must be through a good leadership and supported by anti-fraud awareness high is expected to grow consciousness of all the elements in the organization to control and awareness of leadership fraud. Moral against anti-fraud must conscious any policy or regulations set forth.

Companies must target fraud awareness training for employees and managers are a critical component of a well-rounded platform for preventing and detecting fraud. The common way that occupational fraud is detected is through tips from employees. Research showed that having anti-fraud trainings and programs, the management experience lower frauds.

Anti-fraud trainings and campaigns can play an important role in preventing fraud. American Institute of Certified Public Accountants (AICPA) (2002) in the Anti-Fraud Management and Controls derived from the Statement on Auditing Standard (SAS) 99 reveals the following measurements are used to prevent, deter and detect fraud that consists