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Fraud Deterrence, Detection, and Prevention

Why It Is Important to Train Managers and Employees in Fraud Detection

I would explain to the board that it is of great significance to train managers and workers in fraud detection to minimize losses to the organization. Fraud in an organization can include skimming cash, check tempering, misappropriation of assets, corruption, modifying physical documents, and billing schemes. When workers and managers have the required training, it would be effortless to detect any fraud within the organization, thus, making it easy to control audit charges and decreasing the period that outside auditors can spend for fraud valuation. Additionally, I would tell the committee that training managers and workers about fraud detection is valuable to the company as they would have acquaintance required to identify, preclude and report fraud.

Furthermore, the training would provide an efficient way to converse an organization’s commitment to ethical operations (Strand et al., 2002). This would help ensure the organization adheres to its code of ethics, making work easy for everyone working in the company, as no one would be charged for partaking in fraud. Again, I would explain to the board that coaching workers and managers about fraud detection would help the organization realize its vision within a shorter time. This would increase the organization’s production, thus, leading to its success.

I would also tell the committee that training managers and employees in fraud detection would help the organization identify waste, inefficiencies, and errors, leading to increased profitability. This would ensure that the company thrives in the market and withstand its competitors as it is financially stable. Most organizations collapse due to too much corruption among the managers and workers as they do not probably have the knowledge on fraud detection. As a result, I see it important for workers and managers to be trained on fraud detection to avoid ignoring any suspicious activities they notice in their machines or with their colleagues. This would ensure that the organization is kept away from frauds that may damage its reputation. A bad reputation would lower the company’s customers and sales, increase marketing costs and ruin good relationships with clients. The bad reputation would reduce the organization’s revenues and chase away loyal supporters, thus, closing its doors.

Besides, I would say to the board that training managers and workers in detection of fraud would help ensure that clients and customers do not lose trust in the integrity of the organization’s systems. This would ensure the organization’s transparency in its daily activities. If the organization is found with an internal fraud that affects its customers, this may result in clients leaving the organization and looking for a good one, as they would no longer trust it again. Training the managers and workers would also help avoid legal wrangling in the company. Fraud often opens up the door to litigation from dissatisfied customers and investors. This may result in years, if not decades, of intricate and expensive legal maneuvering. This would be a disgrace to the organization as it would take longer to get where it was before the fraud. As a result of fraud, the banking covenants could be breached, and sanctions and regulatory costs could be incurred. Moreover, I would convince the board that coaching the managers and employees in detection of fraud is of significant help to the organization as it will not have distorted markets, leading to poor performance.

Leaving the work of fraud detection to auditors alone will not help the organization fight fraud unless the workers and managers are made aware of the fraud detection program. This would assist the organization in realizing its strengths, threats, opportunities, and weaknesses.

Effective Ways to Involve Employees and Managers in The Prevention and Detection of Fraud.

I would explain to the head of state that one effective technique of involving managers and workers in preventing and detecting fraud is by developing a system of awarding the workers by promotion (Creek-Tatom, 2020). Through the promotion, the workers feel valued and appreciated, which helps them stay loyal to the organization, reducing the probability of internal fraud as the employee is satisfied. As a result, this would increase productivity while lowering labor turnover.

Furthermore, I would courageously tell the president that developing a system where the fraud should be reported is an effective way to include managers and employees in the prevention and detection of fraud. Having a system where the workers and managers report fraud is significantly helpful because everybody would fear facing the system and the repercussions. This would ensure that fraud is prevented, saving the organization a lot of money.

Having an open-door policy in the organization would ensure employers and managers are effectively included in preventing and detecting fraud. This policy encourages open conversation between the management and workers and ensures everyone is held liable for their deeds, irrespective of their position. This would prevent fraud within the organization as everybody provided they have committed fraud would receive the same penalty, whether a senior manager or an employee.

I would also explain to the president that managers and employees can prevent and detect fraud by ensuring that they have an amicable atmosphere while working. The friendly atmosphere would increase their morale and promote a readiness to work together towards its goals. This would result in happiness among the managers and workers, thus, minimizing any chances of fraud.

Additionally, I would openly tell the president that managers and workers can be involved in fraud prevention by developing a system whereby bonuses, fun gifts, profit-sharing, and wage incentives are given to employees or managers whenever they excel in their work areas. The incentives would prevent the managers and workers from committing fraud, as their hard work is not overlooked.

Effective Means of Deterrence in The Organization.

One effective means of deterrence in the organization is by implementing internal controls which denote the programs or plans executed to safeguard an organization’s assets, ensure the accurateness of its monetary records, and discourage and pinpoint fraud. This would aid in ensuring that the company is pretty safe from fraudsters. Also, documentation can assist in reducing fraud.

Another means of deterrence is hiring trustworthy experts—this is a suitable method that is not too costly. The organization should employ people who can be trusted even with minor things. Not, for example, employing people with criminal cases or gross misconducts from their previous employers. With this, fraud would be significantly deterred. Some company’s details like the bank account numbers are sensitive and need expert, trusted professionals.

Monitoring vacation balances is also a good way of deterrence (Tysiak, 2012). Some employees do not miss any day of their work for a whole year; although this might sound like being loyal, they might be hiding something and are troubled that a person may discover their fraud while absent. The employees should also be rotated to different jobs within the organization. This helps to disclose any fraudulent action as it permits the second worker to review the first employee’s activity.


Creek-Tatom, M. (2020). Prevent Fraud Before It Happens: How to Train Employees to Be Fraud Detectors — ACFE Insights. ACFE Insights. Retrieved February 26, 2022, from

Strand, C., Judd, S. L., & Lancaster, K. A. (2002). Training: A powerful way to prevent fraud. Strategic Finance84(4), 28.

Tysiak, K. (2012). To prevent fraud, offer a hotline train employees on fraud prevention, report says. Journal of Accountancy (May 9). Available at: http://www. journalofaccountancy. com/News/20125666.


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