Business Management Role in Preventing Fraud

In some instances the company’s management is to blame when it comes to fraud cases. As much as the management takes decisive steps to prevent fraud, they are the ones that propel their juniors to commit these acts. This they do unawares by not considering that the people they are managing are also human. In this article I will dwell on how to manage the accounting department for here is where fraud instigates.

One area that the management should avoid is exerting pressure on accounting staff to complete their work in unusually short periods of time in the name of controlling fraud. Putting pressure on accounting staff to take a short time to perform their duties will simply lead to manipulation of data entries, with the fraudsters alluding to mistakes due to hurried calculations and recordings.

Since fraud usually gets discovered way after the fraudster has made his/her kill and has been replaced. The current accountants could also take advantage to commit fraud and blame it on the previous ones. The business management team should therefore ensure accountability of all accounting staff by avoiding a high turnover of key accounting personnel.

At any one time the accounting staff should not be short-staffed, this helps to avoid collusion. Few accountants may easily conspire and agree in unison to defraud the company in secret. They may also chart to commit fraud due to pressure of work as their numbers are few.

The accounting office plays a major role in ensuring a sound financial management. The accounting staff ought therefore to be given good salary packages and incentives to motivate them. This will go a long way to satisfy their financial needs and hence prevent fraud.