Page 652 - ACFE Fraud Reports 2009_2020

FRAUD PREVENTION

CHECKLIST

The most cost-effective way to limit fraud losses is to prevent fraud from occurring. This checklist is designed
to help organizations test the effectiveness of their fraud prevention measures. Additional guidance, resourc-
es, and tools for managing organizational fraud risk can be found at ACFE.com/fraudrisktools.

1. Is ongoing anti-fraud training provided to all 3. To increase employees’ perception of detec-
employees of the organization? tion, are the following proactive measures
taken and publicized to employees?
❑ Do employees understand what constitutes
fraud? ❑ Is possible fraudulent conduct aggressively
❑ Have the costs of fraud to the company and sought out, rather than dealt with passively?
everyone in it — including lost profits, adverse ❑ Does the organization send the message
publicity, potential job loss, and decreased that it actively seeks out fraudulent conduct
morale and productivity — been made clear through fraud assessment questioning by
to employees? auditors?
❑ Do employees know where to seek advice ❑ Are surprise fraud audits performed in
when faced with uncertain ethical decisions, addition to regularly scheduled audits?
and do they believe that they can speak ❑ Is continuous monitoring software used to
freely? detect fraud and, if so, has the use of such
❑ Has a policy of zero-tolerance for fraud been software been made known throughout the
communicated to employees through words organization?
and actions?
4. Is the management climate/tone at the top one
2. Is an effective fraud reporting mechanism in of honesty and integrity?
place?
❑ Are employees surveyed to determine the
❑ Have employees been taught how to com- extent to which they believe management
municate concerns about known or potential acts with honesty and integrity?
wrongdoing? ❑ Are performance goals realistic?
❑ Is there a reporting channel, such as a ❑ Have fraud prevention goals been incorpo-
third-party hotline, available to employees? rated into the performance measures that are
❑ Do employees trust that they can report sus- used to evaluate managers and to determine
picious activity anonymously and/or confiden- performance-related compensation?
tially (where legally permissible) and without ❑ Has the organization established, implement-
fear of reprisal? ed, and tested a process for oversight of
❑ Has it been made clear to employees that fraud risks by the board of directors or others
reports of suspicious activity will be promptly charged with governance (e.g., the audit
and thoroughly evaluated? committee)?
❑ Do reporting policies and mechanisms extend to
vendors, customers, and other outside parties?

76 Fraud Prevention Checklist Report to the Nations