Actively look for fraud and reduce financial losses - Crawford Ellenbogen

In general, passive fraud detection methods, such as accidental discovery or notification by police, coincide with longer-running fraud schemes and higher financial losses. To nab dishonest employees quickly and limit losses, your organization needs to be proactive. Active detection methods include IT controls, account reconciliation, management review, surprise audits and internal audits. Tips, the leading fraud detection method, are also valuable. To encourage tips, provide a confidential fraud hotline and a Web-based form. Also train supervisors, so that employees are comfortable reporting suspicions to them.