Running head: SECURITY AND LOSS PREVENTION

Security and Loss Prevention An Assignment Submitted by Name of Student Name of Establishment Class XXXX, Section XXXX, Fall 2012

SECURITY AND LOSS PREVENTION Abstract This research paper is about the comprehensive guide for the managing the business risks for fraud. The paper will talk about procedures that should be implemented with this particular guide in order to prevent any fraud activities. It will also provide a research about benefits of a comprehensive program, and it will be suggested author`s own original plan of fraud control and managing. Through the paper it will be discussed an implementation of a fraud hotline as a part of suggested plan.

Keywords: fraud prevention, fraud hotline

SECURITY AND LOSS PREVENTION Loss Prevention Policies All organizations are potentially subject of fraud. Large frauds can cause the downfall of entire organizations and the losses of massive investments. Preventive activities have been implemented with the guide for managing the business risks of fraud created by such organizations as the Institute of Internal Auditors, the American Institute of Certified Public Accountants, and the Association of Certified Fraud Examiners. A comprehensive fraud control is a guideline that publicizes all the necessary information about fraud prevention and monitoring. Based on the information from Managing the Business Risks of Fraud: A Practical Guide this regulation dictates the statements of fraud prevention, such as: evaluating, designing, and implementing control that allow to reduce level of the impact of fraud. Comprehensive fraud prevention program should be multidimensional and should involve entire enterprise (Coenen, 2008). Since it is known what a comprehensive fraud control means it is necessary to say about its advantages. As a matter of fact, strong risk management can bring such benefits as reducing financial losses due to fraud, improving employee sensitization to fraud, and also increasing reporting of potential frauds (Epps, 2008). There are strategies and techniques that might be proposed in order to prevent and monitor fraud. First of all there must be awareness among employees about fraud, so that some kind of education must be implemented. Thus it is important to inform the public of the necessity of the PINs and passwords which are used frequently with card-based transactions. It is known that in the United Kingdom particularly effective plastic card fraud prevention strategy was implemented (Smith, 1998). The Association of Payment

SECURITY AND LOSS PREVENTION Clearing Services had utilized education campaign to raise public awareness of the fraud problem. Also, it is very important to provide pre-employment integrity screening. This technique should be provided during an interview and can help to analyse and ensure whether potential employee`s dishonest behaviour is likely to occur in the future (Sims & Sims, 1995). Touching techniques of internal control it is necessary to say that one of the effective methods of fraudulent activities confirmation is increasing employee`s perception of detection their opportunity to commit fraud. As a matter of fact key components to internal controls are: segregation of incompatible duties, independent checks, physical security of assets, and proper authorization of proper documentation (Olson, 2007). In fact, some of the employee`s duties are inherently incompatible, so that they provide opportunities for fraud. Such duties as authorization, recording (i.e. posting in accounting system), and custody of assets (such as cash and signed checks) are likely cause opportunities for fraud. Thus, such duties must be redirected to particular employee and should not be spread among the whole team of employees. Fraud control technique should be implemented with utilizing fraud hotline. 46 percent of workplace fraud in 2007 was uncovered due to information gathered from anonymous employees and vendors as well (Olson, 2007). Implementation of proper fraud hotline program implies anonymity and worry-free method to report suspicious activity. Such program should provide toll-free numbers, international toll-free numbers, direct access system (when international toll-free number service in not available). Also, it is important that hotline communication is available in many languages, 24 hours per day.

SECURITY AND LOSS PREVENTION In conclusion it must be said that this paper has identified different methods of fraud prevention considering a possibility of creation an original system of fraud monitoring. Such system and its proper implementation can help to reduce a percentage of fraud activities.

SECURITY AND LOSS PREVENTION

References Tracy L. Coenen. Essentials of Corporate Fraud. (2008). Wiley. Ronald R. Sims, Serbrenia J. Sims. The Importance of Learning Styles: Understanding the Implications for Learning, Course Design, and Education. (1995). Greenwood Publishing Group. Donna Epps. (2008). Managing the business risk of fraud: new guidelines for a new risk environment. Deloitte. Financial Advisory Service. Retrieved from http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/us_fas_managing_the_business_risk_o f_fraud_40908.pdf Dr Russell G. Smith. (December, 1998). Best practice in fraud prevention. Australian Institute of Criminology. Retrieved from http://www.aic.gov.au/documents/F/3/2/%7BF3256DEB-9A04-4416-9D11156922F22EC8%7Dti100.pdf Jason Olson. (2007). Fraud prevention tips for business. Minnesota Business. Retrieved from http://www.eidebailly.com/media/421503/fraud%20prevention%20tips%20for%2 0businesses.pdf