for incidents of fraud, both internal and external, and is the ‘teeth’ of any antifraud program. It sends a clear message that if wrongdoing is suspected, it will be followed up thoroughly and professionally and dealt with accordingly. In this article we explore the practical steps organisations should take to prevent fraud from happening. Our experience is that any organisation, of any size and budget, can find a solution through these steps and can recognise that there really is a benefit to this, and it might be greater than you think. The cycle below attempts to show how this continuous loop could be viewed in practice: Understanding the cycle The first point of note is that fraud prevention is a cycle. It should not be viewed as a series of independent activities. To highlight this, refer to the ACFE and COSO work on Fraud Risk Management, including the Anti-Fraud Playbook3, which provide valuable insights linked to the COSO framework, a founding basis for internal controls. In recent years, the tendency to focus on compliance activities through the lens of a regulatory imperative (including mitigating the risk of a fine) has created ‘pools’ of activity which are not always well synchronised. For example, consider the ‘Governance’ component as ‘tone of the top’ – in our experience there is often a disconnect between the senior executives/Board Directors involved or informed at this stage, and the monitoring (including MI) and reporting that follows later. Ownership at the top is essential. Ensuring the link between anti-fraud steps not only provides a better view of overall risk but facilitates more efficient and effective use of resources. THOUGHT LEADER 69 We become so used to hearing that there is a problem that the risk becomes a background consideration
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