Based on this week’s reading regarding fraud, internal control, and cash, I find an article entitled “How to Find and Stop Fraud within Your Organizations” by Craig Hirsch to be very captivating and educative. Hirsh is a manager in the forensic and regulatory CPA firm. His area of specialty is in forensic accounting, counter terrorist financing and anti-money laundering, corporate investigations, financial intelligence, fraud risk assessments, and dispute consulting. In this article, Hirsch uses his extensive knowledge and understanding to give an in-depth explanation of various aspects of Fraud. Fraud is emerging as one of the most critical impediments to the stability and performance of various organizations ( Bawaneh, 2014 ). The author explains the how fraud occurs within an organization, and shares appropriate measures to deter internal fraud.
According to Hirsch (2012), small Companies are equally placed to suffer the wrath of fraud just like big firms. Fraud is often perpetrated by the loyal and long-tenured employees. Shockingly enough, the external audits only detect frauds by a fraction of 4.6%. In this case, 40% of detected frauds are realized through tips (Hirsch, 2012). Regardless of the significance of tips, an anti-fraud control that is least implemented is the act of rewarding whistleblowers. The basic reason is that whistleblowers have a negative attitude and a long history of inappropriate treatment full of disrespect and low dignity.
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The organization should device various ways to encourage the employees to report any cases of fraud since it occurs within their operational framework. The first step is to change the perception to remove any form of stigma and negativity ( Kimmel, Weygandt & Kieso, 2010). Most employees have a concern of being labeled as the snitches or tattletales. Another significant approach is to introduce a reward system. It is essential to consider provision of cash rewards to obtain tips that will save money via process improvement, as well identification of fraud, abuse, and waste.
References
Bawaneh, Shamsi, S. (2014). Information Security for Organizations and Accounting Information Systems; A Jordan Banking Sector Case. International Review of Management and Business Research, 3, 1184.
Hirsch, C., (2012). How to Find and Stop Fraud within Your Organization. Forbes . Retrieved from https://www.forbes.com/sites/forbesleadershipforum/2012/04/18/how-to-find-and-stop-fraud-within-your-organization/#15f684095b12
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Financial accounting: tools for business decision making . John Wiley & Sons.
