Fraud – Manage it before it destroys you
Fraud is an unethical act that is unfortunately omnipresent in the world
today. It is perpetrated by highly organized and resourceful criminal
individuals and groups. The motivation is normally blind greed.
Fraud can deprive a business of its tangible movable and immovable assets, intellectual property rights, other intangible assets, customer lists, customer details and the entity’s reputation. Except for fidelity insurance covering a limited category of staff such as cashiers, it is not possible to mitigate the effects of frauds through insurance.
Material Fraud is significant and can destroy or seriously cripple a business. This category of fraud needs to be carefully managed with elaborate preventive, detective and punitive procedures. The lesser frauds that exist in most group activities are of relatively smaller value and can be considered immaterial. These immaterial frauds are to be managed with deterrent internal controls. Cost benefit constraints make it unavailable to eliminate such frauds completely.
Fraud can deprive a business of its tangible movable and immovable assets, intellectual property rights, other intangible assets, customer lists, customer details and the entity’s reputation. Except for fidelity insurance covering a limited category of staff such as cashiers, it is not possible to mitigate the effects of frauds through insurance.
Material Fraud is significant and can destroy or seriously cripple a business. This category of fraud needs to be carefully managed with elaborate preventive, detective and punitive procedures. The lesser frauds that exist in most group activities are of relatively smaller value and can be considered immaterial. These immaterial frauds are to be managed with deterrent internal controls. Cost benefit constraints make it unavailable to eliminate such frauds completely.
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