Chapter 1: Smart Hiring, Training and Education, Establish a Reporting System

Chapter 2: Positive Work Environment and Internal Security Policies

4. Positive Work Environment

Develop mutual respect between employer and employees. Encourage managers to establish an open door policy. The physical act of leaving your office door open during times where you are able to meet with employees makes it easier for employees to communicate with you and makes them feel that their input is welcome. Give employees time to speak with you and don’t play favorites.

A positive work environment encourages employees to follow established policies and procedures and act in the best interests of the company. When a company has written job descriptions, clear organizational structure, comprehensive policies and procedures, open lines of communication between management and employees, and positive employee recognition employees feel valued and loyal. This will all help reduce the likelihood of internal fraud and theft.

5. Internal Security Policies

Establish and assess the fraud and theft prevention tools that you have put in place. Make sure that they meet laws and regulations, expenses are accurately documented and anti-theft and fraud training is up-to-date. Monitor the workplace to ensure that employees are following policies and procedures.

Putting in place the following three controls will help to reduce the opportunity for fraud:

• Separation of duties: No employee should be responsible for both recording and processing a transaction.
• Access controls: Access to physical and financial assets and information, as well as accounting systems, should be restricted to authorized employees.
• Authorization controls: Develop and implement policies to determine how financial transactions are initiated, authorized, recorded, and reviewed. Internal controls will reduce opportunities for fraud.

Chapter 3: Audits, Pay Attention to Change, Investigate ALL Tips

Chapter 4: Lead by Example and Continuous Improvement