Fraud Awareness Training
Losses from corporate fraud cost companies an estimated $3.1 billion globally in 2024. But here’s the most shocking truth: Most of these losses started with a simple, preventable action.
A 2024 Report that was conducted by ACFE (Association of Certified Fraud Examiners) has revealed that there have been a staggering 183 cases of fraud conducted in Southeast Asia, with one of the highest corruption cases by region, with a percentage of 74%. This metric was delved further, with a conclusion that the average loss of cases was one of the highest percentiles in their report, with a loss of up to $1,200,000 in the 75th percentile.
With many uncertainties in today’s economy, it leaves a factor of dread for companies about perpetrators back pocketing assets or profits without getting caught for an unspecified amount of time. With this revelation, it’s not shocking that there is an everlasting increase in implementing measures internally to detect and prevent fraud.
From a budgeting point of view, it’s more money added to your business budget under a myriad of things, but most of it comes with its own benefits. In the same report that was conducted by ACFE, it is known that almost half (43%) of cases were reported through tips from employees. Now, after all of this reporting, I think most of the readers want the million-dollar question: how do you prevent fraud in your company?
Your Introduction to Fraud Awareness Training
Most of the best anti-fraud controls come with meticulous planning and good organizational structure, from surprise audits, fraud hotlines, and proactive data analysis as the premium options. For the 1% of organizations, this is pocket change and a standard across all fronts, but for us, who are starting, we need a reliable and cost-effective way to add fraud controls into our business. That’s when Fraud Awareness Training comes in.
Providing fraud awareness training to staff at all levels of an organization is a vital part of a comprehensive anti-fraud program. ACFE report shows that “training employees, managers, and executives about the risks and costs of fraud can help reduce fraud losses and ensure fraud is caught more quickly.”
The Benefits Fraud Awareness Training Provides:
- Tips are TWICE as likely to come from employees who received fraud awareness training as from employees who did not.
- Organizations that provide fraud awareness training decrease their loss nearly 2x MORE
- The duration of fraud with awareness training decreases by a staggering percentage of 50%.
For small businesses, Fraud Awareness Training is a cost-effective way to add anti-fraud control to your company. But if you want to add more defense, the addition of a hotline (it could be as simple as an online form) is a good component to have, with emails and online forms being the top mechanisms of reporting fraud. It adds more cover for your business if fraud were ever detected in your company.
The Next Step if Fraud was Detected
One of the easiest jobs of Fraud Prevention is putting the building blocks, but one of the hardest if the foundation was demolished overnight. Most likely punishment for perpetrators is termination and suspension. Others go further with a criminal referral. But most organizations deal with it differently from others, so your case will be different from others.
An important part of fraud risk management involves remediation after a fraud occurs. This typically involves assessing the factors that led to the fraud and implementing changes to prevent similar incidents from occurring in the future. Not only does it help to scare perpetrators, but it also correlates with fewer losses in the future.