With all the transaction going digital, we are more and more prone to the fraud. But thanks to so many systems, we are safe. So there are many principles of fraud risk management system which we are going to elaborate in this article. Fraud risk management and detection should be the part of your overall risk management system and it should be implemented effectively. So need to go through these below-mentioned points which are going to give a person clear idea of what is needed.
Fraud Risk Governance
There are many companies who take this thing very lightly but the thing is that the fraud risk management needs to be an integral part and it has to be embedded in the DNA of an organization. This should be done in the way of written policies, as defined responsibilities, or also as on-going procedures. This helps in implementing an effective program. The issues which are needed to be addressed will include:
- Roles and responsibilities
• Fraud awareness
• Conflict disclosure
• Fraud risk assessment
• Reporting procedures
• Whistleblower protection
• Investigation process
• Corrective action
• Quality assurance
• On-going monitoring
After the governance of the fraud risks, the main thing needed for the risk management system is having a capable team for the assessment of the risks. This activity might include the determination of the type, potential cost, and likelihood of all the risks which are indulged in a traditional expected framework. The assessment of the risk can be judged by carefully observing how the employees and even the top members of the team are using the company’s resources. The risk is generally thereby the incentives and the policies which are given by the organizations itself. A proper assessment will help in reducing the risk. The dharbor is the team of experts which works with the organizations and gives them a proper insight into their predictive risks.
Well, going by an old saying, prevention is better than cure. And in this case, prevention is better than actually working after the fraud is being detected. The prevention of fraud is very much important and it includes the knowledge of fraud awareness culture, understanding of common policies and procedures. This also comes with the fact that proper communication is required between the people from top to bottom about the importance of risk prevention management system. When everyone is aware of the effects of risk on the organization, then it becomes less likely for the risk to happen and this will increase the credibility of the organization as well.
Monitor and report
If the risk is being monitored but if it is not reported to the right person, then preventive and needed measures will not be taken on time. This will make the risk bigger and also the company prone to downfall.
We can always take the fraud down to a notch while it is not possible to eliminate it completely. There are certain companies with trust in the market like digitalharbor which are working towards risk management for so many sectors. Minimize the risk, maximize the profits.