Fraud – Manage it before it destroys you


Fraud – Manage it before it destroys you
Fraud is an unethical act that is unfortunately omnipresent in the world today. It is perpetrated by highly organized and resourceful criminal individuals and groups. The motivation is normally blind greed. Fraud can deprive a business of its tangible movable and immovable assets, intellectual property rights, other intangible assets, customer lists, customer details, and the entity’s reputation. Except for fidelity insurance covering a limited category of staff such as cashiers, it is not possible to mitigate the effects of frauds through insurance.

Material Fraud is significant and can destroy or seriously cripple a business. This category of fraud needs to be carefully managed with an elaborate preventive, detective and punitive procedures. The lesser frauds that exist in most group activities are of relatively smaller value and can be considered immaterial. These immaterial frauds are to be managed with deterrent internal controls. Cost-benefit constraints make it unviable to eliminate such frauds completely.

Dealing with material fraud

The best way to deal with material fraud is to prevent it. Experienced Fraud Examiners and Forensic Accountants are trained to detect weaknesses in business systems and environments that have already been attacked or are ripe for an attack. The high degree of information sharing in today’s world is helpful to fraudsters. It can also be helpful to their targets if they or their advisers are alert and abreast with the state of the art. Even a high level of expense to preempt fraud is worthwhile because the consequences are often fatal and there is normally no other way to mitigate the risk.

Once a material fraud has been detected, it needs to be addressed quickly and effectively. This is the second-best way of managing fraud. After preventing further damage, the process of comprehensively preparing for a prosecution has to start in order to recover as high a proportion of the loss as possible. Legal and other experts have to work together to provide such services.
The third way of dealing with material fraud is to effectively prosecute the case to minimize the cost and maximize the recovery of lost value. Legal experts have a major role in this activity with the support of other professionals like accounting experts, at appropriate stages of the process.

Next Steps

It can be seen that professional help is necessary to deal with Fraud at various stages before, during and after a fraud is detected. It is therefore in the interest of every business entity, irrespective of size, to consult an experienced Fraud Examiner for enlisting appropriate relevant services at the right time.

For a no-obligation initial consultation, please contact:
Mr. Reyees. K.P | Director
ARC Associates
Tel: +971 4 4431604
PO BOX 390831
Mob: 055 4874391
B2B Tower, Office 1213
Business Bay
Dubai, UAE