Understanding Fraud Management Best Practices

Security professionals have plenty to worry about when protecting their organizations from external threats, so fraud that takes place within a company can be viewed as an unnecessary hassle. However, too much of a focus on external threats could allow internal threats to flourish, with employees trying to bring the company down from within for personal gain. Whether they’re disgruntled, selfish, or bored, employees who commit fraud may be able to get away with their crimes for a long time. That’s because they can hide in plain sight. In many cases, employees committing fraud are the ones responsible for gatekeeping the sensitive data and systems they exploit.

Business woman anonymously reporting fraudulent financial results

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There are many ways employees can commit fraud and hurt a company from the inside. One of the most common ways fraud happens is when employees manipulate company records or orders to funnel money or goods to themselves. These employees might alter payroll records to get credit for hours they did not work; they may doctor accounts payable to duplicate payments to vendors; or they may simply take physical assets home with them at the end of the day. A common type of fraud includes intellectual property fraud, in which employees may try to steal sensitive information or pass counterfeit items as legitimate. Another example is corruption, in which employees may try to manipulate relationships with vendors to gain benefits in exchange for preferential treatment.

Although the effects of fraud can be devastating to a business, there are steps businesses can take to protect themselves and prevent prevalent types of fraud that could take place within their companies. Check out the graphic by Column Case Investigative for more tips below.

Fraud management infographic
Provided by Column Case Investigative