Economic Crime Investigation

The prevention of fraud in the organization is a responsibility vested upon all the levels in the system. Apart from the damage it does on the reputation of the organization and the disruptive nature it has to the normal running of business, fraud and corruption can be very costly to any organization especially considering all the outlay that would be required to carry out investigation and identification, the time consumed in the process, and the fact that the whole thing is very unpleasant (Rue 2008). The following outline provides a plan on how frauds will be prevented by the organization at different levels.

At each level, measures are put in place which aim at denying the opportunity for fraud while providing effective auditing and leadership. The top management should be responsible for ensuring a work environment that upholds ethical behavior and honesty to all employees, contractors and other stakeholders. Therefore the top management should maintain consistent communication with other lower levels of the organization about behaving ethically. This should be done by behaving ethically and designing policies that are geared towards achieving this (Lang and Ricciardella 2007).

The middle management should ensure implementation of effective internal control systems which are aimed at preventing and detecting any irregularities so that fraud is prevented before it occurs. In this respect, the management will be charged with the duty of determining the effectiveness of the internal controls by carrying out periodic risk and control evaluations. By doing this, it should be able to carry out various functions. The first function is evaluating the operational processes of the unit being considered. Secondly, it will find it necessary to establish the potential threat of risk innate in each process.

Another function in this docket will be to pin point the controls that if applied may reduce the inherent risk and then carry out an assessment of any internal controls which need to be added to the present system or process to improve it and prevent any future occurrences of fraud. By carrying out an assessment of the controls, the middle management should adopt those that are determined to be more efficient and effective in alleviating the problem of fraud in the organization besides which it should ensure satisfactory separation of assignments and duties among the employees.

The middle management should also provide an adequate physical protection to assets of the organization which include cash and equipment and human resources. Ensure that all transactions are appropriately documented. Lastly, proper delegation and supervision of employees to ensure that projects are accomplished as designated should be a function that this department must put into consideration. The internal audit has a role to play as described by the professional body of Internal Auditors.

The professional body highlights that the internal auditor is supposed to have sufficient knowledge that can enable identification of the indicators of fraud though is not expected to have the proficiency of a person whose principal responsibility is detection and investigation of fraud (Lang and Ricciardella 2007). The department of internal audit should also be responsible for carrying out a methodical review and do an appraisal of all the operations with the main intention of advising the management concerning the efficiency, economy and effectiveness of internal management policies, practices and controls.

The work plan for the internal audit in prevention of future frauds will entail several functions too. These will include establishing areas of operations which are at risk, pin pointing probable fraud schemes, defining Red Flags-indicators, coming up with audit steps which can be applied in searching for indicators and appealing for specialists’ assistance when there is heavy suspicion of fraud hence ensue an investigation step (Rue 2008)

Corporate security on the other side will be responsible for identification and effective mitigation or management of physical entities as well as intellectual property (be it tangible or intangible) and identify any development which may pose a threat to the flexibility and continuity of the corporation. Anyone will realize that this corporate security is a vital concern to any organization, despite the size.

Most businesses in these days employ the use of digital technologies especially given that these days most businesses make use of computers in the advent of the new idea of e-commerce which have centered more on the efficiency of corporate intelligence. The corporate intelligence will also take care of any hacker concerns. This department will thus liaise with corporate intelligence by giving litigation support in complex fraud situations and also help in investigation support which may entail asset tracing among other investigations that involve problem-solving (Rue 2008).

The legal counsel will fully be responsible for providing guidance concerning the involvement of external experts or even that of other legal authorities and then carry out investigations. The legal counsel will also give guidance to the internal audit and the director concerning fraud and its consequences during investigation and after. The responsible of the audit committee will include building an environment of honesty and accountability to give confidence to the reporting and exposure of fraud concerns and make sure those sufficient processes and controls are in operational and in place all the time.

The committee will also have the responsibility of obtaining reports on any illegality, dishonesty, or ethical slip, regardless of materiality. In case of detection of possible fraud, the audit committee shall be responsible for making sure that the fraudster is separated (Rue 2008).

References: Rue, M. , 2008 “The IUCN Anti-Fraud Policy”- The World Conservation Union Gland, Switzerland Person, S. (2005) “Financial Statement Fraud: Prevention and Detection”. Journal of Accountancy, 194 Lang, A. , S. and Ricciardella, T. , S. (2007) “Preventing Fraud: How to Safeguard Your Organization” Board source Organization: Washington, DC