The Holmes guide to corporate governance and fraud protection
In the advent of day-to-day frauds and siphoning of money, revolutionary governance and internal control occupy a vital significance. With the everyday bubble of bankrupt companies bursting out, the following mistakes should be avoided by the corporates:
(i) No provision made for impairment of investments
(ii) No adequate provision for receivables
(iii) Booking sales aggressively, without looking at the current deliverables
(iv) Instances of Sales being reversed lack of supporting documents
(v) Instances of Preferential transactions, deficiency in accounting norms & preferential treatment of Vendor payments
(vi) Over-valued Redemption of investments
(vii) Assets stripping & financial misstatements
Further, Frauds can be prevented by the following:
Employees are most likely to report misdeeds, if we educate them to help the company as an integral part of fraud prevention program. Efforts to stop employee fraud & investigations of suspected fraud should deter other employees from committing fraud.
(i) Always check references and perform background checks that include employment, credit, licensing and criminal history for all new hires
(ii) Impropriety
(iii) Secure physical assets, data and money
(iv) Review all disbursements regularly
(v) Proper authorization of transactions
(vi) All account reconciliations should be audited/independent review by a third party
