Hand writing text caption inspiration showing Fraud concept meaning Criminal hacker security prevention written on old announcement road sign with background and space
The most important elements in the area of fraud are considered to be risk and materiality. The assessment of the importance of these factors will, to some degree, determine how serious the corporation treats the prevention and detection of fraud. It will also affect the means dedicated to fraud related tasks, so it is important for all assessors to give proper consideration to the risk and material of fraud in their organization. Not everyone can afford the high-tech resources needed for fraud prevention, but there are some definite preventive measures that can be practiced by anyone.

Types of Fraudulent Acts

Fraud can be committed through many types of media including mail, wire, phone, and the internet (Computer Crimes and Internet fraud). The international magnitudes of the web and comfort with which users can hide their location, the trouble of checking identity and legality online, and the simplicity with which hackers can distract browsers to fraudulent sites and steal credit card details have all subsidized to the very rapid growth of internet fraud. In some countries, tax fraud is also prosecuted under false billing or tax forgery.

Fraud as a Civil Wrong

The court structure observes fraud as a civil wrong, known as a “tort.” Each jurisdiction has a definite description of fraud, but it is mostly deliberated to be the intentional misrepresentation of essential facts. For a civil wrong to be reflected, certain features must be in place, including:

1. Demonstrating the state of mind of both the committer and victim at the time of the crime

2. Substantiating the fraud occurred with clear and conclusive evidence

Fraud as a Criminal Offense

Certain varieties of fraud are categorized as criminal offenses, mainly if the offender is involved in theft under false simulations. Like civil wrongs, certain features must be in place for fraud to fall under the category of a criminal offense.

1. Deliberate sham by false pretense with the intent to persuade the victim to part with money or property

2. The belief in the dishonesty by the victim, who actually parts with the money or property under the false pretenses

3. The perpetrator keeping, or aiming to keep, the money or property in inquiry

Fraud prevention

It is vital to an association, large or small, to have a fraud prevention plan in place. Fortunately, there are ways you can minimize fraud incidences by executing different measures and controls.

1. Know your employees: Fraud committers often display behavioral mannerisms that can indicate the intent to commit fraud. Observing and listening to employees can help you identify a potential fraud risk. It is important for management to be involved with their employees and take the time to get to know them.

2. Make employees aware/set up reporting system: Awareness affects all personnel. Everyone within the association should be conscious of the fraud risk policy containing types of fraud and the consequences associated with them. Those who are planning to commit fraud will know that management is watching and will hopefully be dissuaded by this.

3. Implement internal controls: Internal controls are the plans and/or programs that are applied to safeguard your company’s possessions, ensure the reliability of its accounting records, and prevent and detect fraud and theft.

4. Monitor vacation balances: You might be enthralled by the employees who haven’t missed a day of work in years. While these may sound like loyal employees, it could be a sign that these employees have something to hide and are worried that someone will detect their fraud if they were out of the office for a period of time. It is also a good idea to rotate workers to various jobs within a firm.

5. Hire Experts: Certified Fraud Examiners (CFE), Certified Public Accountants (CPA) and CPAs who are certified in Financial Forensics (CFF) can help you in establishing anti-fraud policies and procedures. These specialists can provide a wide range of facilities from complete internal control audits and forensic analysis in general to basic consultations.  

6. Live the corporate culture: A positive work environment can prevent employee fraud and theft. There should be a clear organizational structure, written policies and procedures, and fair employment practices. An open-door policy can also provide a great fraud prevention system as it gives employees open lines of communication with administration.

Final Note

Those who are willing to commit fraud do not differentiate. It can happen in large or small companies across various industries and geographic locations. Professional fraud can result in enormous financial loss, legal costs, and a ruined reputation that can eventually lead to the downfall of a business. Having the proper plans in place can suggestively reduce fraudulent activities from occurring or cut losses if a fraud has already occurred. Following through with the policy and enforcing the noted steps and consequences when someone is caught is crucial to preventing fraud.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.


fraud prevention - Complete Controller

Virtually every business faces fraud and has cost companies an estimated 5 percent of their annual profits. Businesses who lack preemptive fraud prevention measures are the most at risk. Fraud itself can be a civil wrong or a criminal wrong, and in some cases, it may cause no loss of money, property, or legal right but can still be an element of another civil or criminal wrong. Traditional in-house controls can be ineffective in averting fraud. The most important thing to do is to discover what steps can be adopted by individuals to protect their business from fraud.

Types of frauds Check out America's Best Bookkeepers

There are a number of techniques to commit fraud, as criminals use their imagination in finding new methods every day as the world progresses. Some of the most generally committed types of fraud include:

  1. Check Fraud: Check fraud happens when an individual deliberately pays for something with a check and knows that there is not sufficient cash in the account to cover the cost or when a person fakes or forges a check stolen from someone else.
  2. Internet Sales: Internet frauds are becoming more widespread since the world depends severely on technology. This type of fraud comprises of selling fake or forged items or taking fees with no intention to ship or deliver the item.
  3. Website Misdirection: This happens when hackers copycat respectable establishments such as Amazon, eBay, or PayPal, transmitting customers to another website where they enter their credit card information. The criminal then uses this information to make personal acquisitions.
  4. Charities Fraud: For several years, felons have benefited from the fact that Americans generously give to praiseworthy causes. Convicts implore individuals to make contributions to different foundations that do not exist. Check out America's Best Bookkeepers
  5. Work-from-home Scams: Operating from home sounds like a dream come true to many people, so it is not astounding that a number of individuals fall for this sort of fraud each year. Criminals promise a salary to people who sign up for their fabricated work-from-home job, often demanding that money be paid upfront with the promise of a big settlement in a short amount of time.
  6. Identity Theft: One of the most frequently executed types of fraud in this age, identity theft mugs victims of their money, credit rating, and personal identity. Impostors obtain credit cards, bank accounts, and other personal information, using them for personal gain.
  7. Credit card Fraud: In today’s environment of automated transactions, credit card fraud has become a dominant crime. By gaining people’s credit card information, through a variety of resources, the criminal can rapidly make a large amount of purchases before the consumer even comprehends what is happening. Credit card fraud is categorized as identity theft, identity assumption, or a fraud spree, depending on the particulars of the criminality.
  8. Insurance Fraud: Insurance fraud is committed every day by people who otherwise would not consider themselves to be lawbreakers. Incorrect or inflated insurance claims for automobile damages, health care expenditures, and homeowners or renters insurance are considered to be insurance fraud. They may be charged as crimes, depending on the circumstances and volume of the fraud.

Fraud Prevention and Warning Signs

To avoid becoming victims of fraud, people need to protect themselves by learning the warning signs of fraud: Check out America's Best Bookkeepers

  1. Phone calls in which the caller asks for money to be sent in exchange for an offer.
  2. Phone calls in which the caller asks for a social security number (even if they only request the last four digits).
  3. Phone calls in which the caller asks for personal information, including a bank account or credit card number.
  4. Receiving unsolicited mail or emails requesting the person send money with the threat that he may lose their credit cards or driver’s license if they do not obey.

Possibly the most significant personal policy to protect yourself against fraud is to never provide personal information over the phone, mail, or email. A respectable bill collector, bank, or loan company will never demand money upfront. If a person receives an offer or a demand for payment, they should look up the corporation’s contact information on their own, contact the establishment directly, and check with the Better Business Bureau in their state to ensure the company is authentic. When retailing an item of large value, an individual should also appeal a cash payment to avoid check or wire fraud.

Final Note

Keeping these warning signs in mind, an individual can prevent fraud by timely detection of fraudulent activities.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers