How to Prevent Identity Theft & Fraud. Types of Corporate Frauds.


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How to Prevent Fraud

Avoiding corporate fraud is no easy task considering the great variety of forms of embezzlement and deception that may take place. In the past 20 years, over 1,000 executives have been convicted of corporate fraud. Adding to the challenges of fraud prevention and detection, commerce and banking channels, from physical channels to digital channels, continue to expand, making fraud prevention much harder, despite companies having greatly benefitted from the high level of business that anywhere transactions bring.

Types of Corporate Frauds

Corporate fraud prevention with respect to business fraud focuses three categories: asset misappropriation, corruption, and financial statement fraud. The least harmful, but most common among these is asset misappropriation, which accounts for 90% of all fraud cases. Examples would included falsifying expense reports. Suppose a manager reported the need for a computer repair, but indeed ended up not repairing the computer or having it repaired by an underqualified person while spending the bulk of the money on sports betting. Another form of this could be stealing cash before it has been recorded or afterwards or taking home non-cash assets of the company, such as a printer. The most costly type of fraud is financial statement fraud, which comprises less than 5 percent of cases but typically causes the greatest financial losses. This could include overreporting how much the company is making and concealing its liabilities. Corruption fell in the middle, rendering employee fraud prevention a stiff challenge, employees abusing their position of power for their benefit, such as taking bribes.

How to Prevent Identity Theft and Fraud

Companies are well-advised to hire the services of the best fraud prevention company to tackle the task of preventing corporate fraud. Preventing fraud is too much of an extensive, tall task for a company unspecialized in the field to check fraud prevention on its own. Over 90% of online fraud prevention resources use transaction rules as fraud prevention tools to direct suspicious transactions through a human review process – a traditional rule-based approach. The best fraud prevention solutions maximize this via AI – to provide precedents and systematize fraud prevention. These companies employ fraud prevention KPIs to measure risk and the probability of an event or circumstance resulting in fraud.


Fraud Prevention Tips

Too many companies do not have a system and hope to be able to prevent corporate fraud when a daunting situation arises, rather than avoiding it by making it hard to commit in the first place. For companies that don’t know how to prevent fraud, one of the first things it should do is encourage an uplifting company spirit and energy at the office. As for the best practice, that entails making fraud prevention procedure as clear as possible to the employees. Internal controls to prevent fraud may be applied to restrict employees based on algorithms worked out by AI and the experience of the fraud prevention company that knows how to prevent fraud better than anyone.


Fraud Employee monitoring Investigation