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Fraud Prevention Consulting

Preventing economic criminality involves the development and implementation of measures to avert or at least minimize both the risk of fraud and the primary and secondary losses that result from it.

For the majority of companies, fraudulent acts are only ever discovered (sometimes internally sometimes externally) by chance – a fact that further proves the case for better prevention. Imagine how much economic criminality is not being stumbled across.

The main challenge in fraud prevention is to strike the right balance between trust and control. As already mentioned, a level of trust and identification with the company are both important for engendering employee honesty. But it is often the very employees in whom a high level of trust is placed (i.e. those who have been with the company for many years) who become perpetrators. That means you cannot do without some degree of control.

At the core of a good prevention plan are the delicate tasks of finding the right balance and communicating the necessity for checks and controls. And controls that can lead to the detection of acts of economic criminality are also a significant prevention factor: The higher the chances of individual acts of fraud being discovered, the greater the deterrent effect of the control system on potential perpetrators.

If a company’s own internal audit department is going to be involved in the development and implementation of a fraud prevention system, then it is important not to force the department into an operative role that would compromise its independence and objectivity – a good argument for leaving this job to external specialists.

It is also clear that risk management and internal audit both need to be involved. Specialists in the prevention, detection and investigation of fraudulent acts have developed a good understanding of perpetrators’ motives, thought and behavior patterns and common mistakes. Their experience has also given them an expert level of knowledge of the most common mistakes made by companies. Mistakes that can leave them open to fraud, and can even encourage it. In fact, it is no exaggeration to say that without this expertise, setting up an effective, targeted, company-specific fraud prevention system is virtually impossible.

The most effective way to combat fraud is to prevent it!
The AuditFactory can help. You can either:

  • outsource the job to us and we will handle the entire fraud prevention project, or
  • engage us as a partner and we will work on the project together with your internal audit department, risk management and/or fraud manager.