Importance of Fraud Prevention and Awareness in a Business Organization

Abstract

It is a common knowledge that companies hire good people but sometimes good people do the wrong thing. Fraud occurs every day all over the world and can happen at any level in any department of any business. It is any premeditated act to dispossess another’s property or money by cleverness or any other unfair means. According to various forensic studies and researches, the Fraud triangle can enlighten everyone that there are three (3) core factors or elements why fraud occurs. Fraud is a serious threat that deserves serious responsiveness and immediate action. The influence of fraud can be substantial. Aside from the extensive monetary losses, fraud has a great effect on the business’ reputation, legal cost and can lead to detention and worst the bankruptcy of the business. Experts say that effective early fraud prevention, early discovery and accurate response mechanisms will play a very important role in the preservation and maintenance of the organizations’ interest against these harmful impacts. Fraud is very alarming whether it is big or small, it can lead to the downfall of the whole organization. It is everyone’s part and responsibility to guard the assets and the possessions of the company from the top management down to the rank and file of the organization. This study aims to identify how important the fraud awareness and prevention in a business organization. This paper also summarizes and tackles some techniques on how to identify and handle situations concerning fraud in an organization.