Fraud: No Organization is Immune

Bergan Paulsen Partner, Mike Regan, was published in the most recent Fall edition of the Minnesota Grain and Feed Association’s Mill & Elevator Magazine. The full article, “Fraud:No Organization is Immune” dives into what agribusiness organizations can do to protect themselves from the three types of fraud.  Read the highlights below.

Businesses purchase insurance to protect their companies from natural disasters and develop procedures to secure trade secrets from outside competitors, but not all businesses have developed the proper processes to protect themselves from internal corruption and fraud.  Because instances of fraud can cost a company millions, it is important to know that there are ways to prevent fraud and to detect these instances early. 

The top five things agribusiness organizations can do to protect themselves from fraud:

1.      Fraud hotline – Allowing others in the organization to submit anonymous tips of fraudulent activity accounts for over 40% of initial detections and is, by far, the most effective action an organization can take. 

2.      Internal procedures established by management – Developing budgets and establishing measurable financial objectives set clear expectations of acceptable employee behavior.

3.      Fraud awareness/ethics training – Ensure that all employees are aware of what to look for and understand company policies and procedures on reporting potential fraudulent activities.

4.      Internal audits – Internal auditors provide ongoing monitoring and assessments of activities.

5.      Surprise audits - An unannounced audit or a different auditing process can bring to light fraud that perpetrators did not have time to cover up. Surprise audits can also be useful at deterring fraud, not just detecting it.

Source: 2010 Report to the Nations on Occupational Fraud and Abuse, published by the Association of Certified Fraud Examiners.