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Essay / Research Paper Abstract
This 5 page paper provides an overview of fraud detection and how companies can use the internal auditing process to spot problems before they happen. Recommendations are made. Bibliography lists 8 sources.
Page Count:
5 pages (~225 words per page)
File: RT13_SA216frd.rtf
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Unformatted sample text from the term paper:
is on the rise (David, 1992). And while consumer fraud is a problem as it concerns vendors and ordinarily consumers, it is an increasing problem in respect to employees.
In terms of fraud prevention, Rodgers (1998) recommends segregation of duties, control over blank checks, scrutiny of facsimile signatures, and documentation for all transactions and journal entries, as some
things that can be done to resolve the problem. A good plan of action to prevent fraud involves a myriad of procedures, inclusive of what is described
above, but what is really important is something that is done even before new hires are permitted to work with money or accounts. That is, every employees character should be
scrutinized. Nadler (2002) says that of the four Cs of credit which are character, capacity, conditions, and collateral, are important, but most lenders agree that character is the
most important part of the equation. If there is a deficiency in character, no amount of controls can prevent that person from committing fraud (2002). In addition to being careful
about loan applications, employees should receive the same degree of attention when entering the institution. That said, assuming a bank or other business takes great pains to hire reliable individuals
in important financial roles, what can be done to make sure that fraud does not occur? First, an internal auditor is a firms most important asset in respect to fraud
prevention. It is the job of the internal auditor to make sure that signals of fraud are caught before anyone has a chance to get away with a crime. The
insurance company internal auditor, for example, is usually in the best position to detect, deter or prevent fraud that might be committed by an employee (Hillison, Pacini,
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