Risk Insights: Stop Fraud in its Tracks

The most direct cost of fraud within an organization may be measured by the amount of assets stolen or in the difference between actual financial performance and what was presented in misstated reports. Costs may extend to stockholders, current and retired employees, vendors, customers and others.

Business disruption accompanies fraud investigations, as do possible lawsuits and criminal charges. Although more difficult to quantify, the long-term losses of confidence and trust among all stakeholders may be the highest costs organizations face when exposing fraud. Recovering from those losses can take years, and sometimes the damage is so severe that recovery is not possible.

Fraud is destructive and pervasive, and it does not just happen to other people or other organizations. A typical fraud scheme goes undetected for 18 months. When fraud is discovered, the full amount of the known tangible losses is seldom recovered. Recovering the intangible assets that fraud takes – assets such as corporate goodwill, credibility and trust – is even more difficult.

Making every reasonable effort to keep fraud from occurring is less costly and far less daunting than addressing its aftermath. Emphasis on prevention begins with understanding the various ways fraud is executed and the general principles that deter fraud.

Learn more about the dangers of fraud, the primary categories of fraud, common elements found in all schemes, and how to effectively stop fraud in your organization in the Weaver Risk Insights document, Stop Fraud in Its Tracks, or view our version specifically for the financial industry.

Fraud can threaten an organization’s existence, and it’s crucial to stop fraud before it happens. Don’t just wait until you are working on fraud detection in your company.