7 Strategies to Prevent and Detect Fraudulent Activities in Businesses

Fraudulent activities can cause serious financial losses and damage to businesses. To protect their organizations, companies must develop a well-structured fraud prevention plan that includes preventive measures and procedures to manage the risk of fraud. The framework should incorporate clear policies and procedures for detecting, preventing and responding to fraud. Here are seven strategies that businesses can use to prevent and detect fraudulent activities.

1.Know Your Employees

Frauders often display behavioral traits that may indicate employee intent to commit fraud.

Companies should be aware of these traits and take steps to identify any suspicious behavior. This includes conducting background checks on new hires, monitoring employee activity, and having a system in place for employees to report any suspicious activity.

2.Establish Clear Policies and Procedures

Organizations should establish clear policies and procedures for detecting, preventing, and responding to fraud. This includes setting up internal controls such as segregation of duties, dual authorization, and independent reviews. It also includes having a system in place for employees to report any suspicious activity.

3.Monitor Transactions

Organizations should monitor transactions for any suspicious activity or discrepancies between internal records and external documents.

This includes comparing multiple data points and sources to detect trends, transactions, and suspicious events that might otherwise have gone unnoticed.

4.Invest in Advanced Fraud Detection Solutions

Organizations should invest in more advanced fraud detection and prevention solutions to protect their company from financial losses and ensure compliance with applicable laws and regulations. These solutions can help organizations create a comprehensive fraud detection and prevention solution that can effectively mitigate the risk of fraudulent activities.

5.Train Employees

Organizations should provide training for employees on how to identify transaction patterns or changes in customer behavior that may indicate fraud, detect discrepancies between internal records and external documents, and know when to refer suspicious activities to the appropriate authorities.

6.Implement Internal Controls

Organizations should implement internal controls such as segregation of duties, dual authorization, independent reviews, and other measures to help prevent and detect fraud in their agency.

7.Contact a Risk Advisor or Forensic Professional

Organizations should contact a Kaufman Rossin risk advisor or forensic professional to learn more about how they can be better prepared to prevent and detect fraud in their organization.