Internal fraud from employees, also called occupational fraud, continues to be the biggest source of fraud, e.g. CIFAS: cases of internal fraud against organisations increased seven-fold in 2016, a global engineering company lost $100million in 2017, etc. The ACFE Global Fraud 2016 report estimated that occupational fraud costs businesses 5% of revenues each year.
Although CTMfile’s list of checklists:
- Get your board to answer these vital questions
- ’10 steps to Cyber security from UK’s GCHQ’ (UK Government Communications Headquarters) who monitor the Internet and many other networks, see
- SANS (System Administration, Networking, and Security Institute) ‘Critical Security Controls’ —a short list of controls developed by security experts world-wide based on practices that are known to be effective in reducing cyber risks
- NIST (National Institute of Standards and Technology) Framework for Improving Critical Infrastructure Cybersecurity—combines a variety of cybersecurity standards and best practices together, see
- Shared Assessments—an organization that develops assessment questionnaires for use by its members, see
- ACFE’s Fraud Prevention Checklist, see
- ’40 questions you should have in your vendor security assessment’ from BITsight which shows how to monitor and manage vendor security, see.
Focus on several key areas in minimizing fraud, but what is often not given enough emphasis is the need to creatie a Speak Up Culture so emplyees report any suspicious behaviours.
Speak Up Culture
In sustainable ethical organisations there is increased emphasis on encouraging employees to speak up when they observe unethical behaviour which doesn’t just apply to fraud, it applies to how to how the whole organisation operates.
ETHICALSYSTEMS.org have published a series of materials on shaping behavior in developing a Speak Up Culture, see, explaining how companies need to replace, “talk down hierarchies which tend to create a culture that encourages them to remain silent. Those at the bottom of the hierarchy site two main reasons for not speaking up:
– Fear: freight of tasting retaliation and hostility if a speaker
– Futility: many employees believe it is useless to speak up.
ETS recommend that companies should:
– Solicit feedback: the proactively encourage employees to providefeedback
– Set an example: talk regularly about ethical issues
– Ensure tthat employee reviews and feedback sessions are carried out throughout the year
– Never tolerate retaliation for any feedback from employees.
CTMfile take: Employee feedback is essential in long term sustainable organisations, particularly for finding out about internal fraud. Think how much fraud would have been prevented if your staff really believed there would be no retaliation for “Speaking Up”.
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