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Also, businesses are deceived in many ways by their own employees and by
the people they deal with. According to Smith (1999, p.
1), due to financial crimes involving fraud, businesses or any ventures
may also be considered victims. In fact, a survey carried out by Association of
Certified Fraud Examiners reported that a firm loses 5% of proceeds yearly due
to fraud. An estimated amount of $3.7 trillion was lost in 2013 (Klein, 2016, p. 6). The business be it small, medium
or large loses a certain percentage of their hard-earned income as frauds
increase yearly.


In this essay, the following definitions will be used. Firstly,
according to Black’s Law Dictionary cited in Gee (2014,
p.1), fraud is defined as a demonstration of intentional misdirection or
deceptive nature executed by at least one people, for the most part for
monetary benefit. Secondly, according to Australian
Taxation Office (2017, p.1), large businesses can be defined as public
or private companies with a turnover level $250 million and above. Finally,
small to medium businesses can be defined as a producer with two hundred or
fewer regular employees Customs Act 1901 (2013, p.1)

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This essay will explain the methods to avoid fraud in medium to large
businesses and also discuss the most effective methods.


Every organization or business firms are the victims of fraud at some
point. One cannot guarantee that one can eliminate the fraud permanently.
However, an organization has the option to at least look for the prevention
techniques to avoid fraud. Therefore, there are few methodologies an
organization need to follow in order to avoid fraud.



The first method to steer clear of fraud in businesses is to set up whistleblowing

According to Brown cited in (Lee & Fargher,
2012, p.284), while evolving an interior whistle-blowing system, it is
suggested to develop in such a way that is accompaniment an organizations code
of ethics. According to Mangala and Kumari (2015,
p.58), examples of whistleblowing can be e-mails, telephones hotlines
and emails. In addition, according to Association of Certified Fraud Examiner
cited in Rivest and Lanoue (2015, p.298), hotlines
are anonymous reporting mechanism that can be utilized by employees, providers
or customers to file irregular activities or allegations of fraud. Furthermore
(Rivest & Lanoue, 2015, p.298) states that hotlines additionally assist
locate fraud quicker, which has an effective effect on lowering the quantities

For example, in Canada, businesses with hotlines helped reduced fraud
loss from C$1,147,180 to C$811,714 which is equivalent to nearly 30 percent in
financial saving. Therefore, representing significant benefits which
counterbalance the costs incurred to enforce and run this type of reporting




Secondly, the excellent method to avoid fraudster is to do the
proof-based research into individual’s past before the person’s entry into the
businesses, (Sheridan, 2014, p.238). Furthermore,
according to Sheridan (2014, p.235), normally basic reference checking is done
with an excellent a further test or two with individuals who know the
candidate, however, are not indexed as referees. In addition, a few businesses
also have considered complying with investigations, specifically for employees
in positions of belief, on a periodic foundation (as an instance, every five
years), (Biegelman & Bartow, 2012, p.107). Moreover,
affirming that there are now more job seekers where there is a chance that the
job seekers might try hard to get the job by falsifying their documents. As an
example, in one of the personal interviews with the author, it was found out
that about 15% of job seekers applications included false data, (Kovacich, 2017, p.108).



Thirdly, it is always considered safe to set up good and appropriate
rules and regulations by every organization for the smooth run. In fact, an
organization needs to have decided in advance what it might do if a fraud occurred;
particularly, what consequences could be meted out for what types of frauds and
stages of fraud, (Singleton & Singleton, 2010,
p.137). Furthermore, according to O’Gara (2004,
p.134), the set of principles are disseminated every year, and all the member
of staffs are required to declare that they have perused and comprehended it.
Also, that they will act according to the fraud strategy. However, a current
positive turn on this training is expecting a member of staff to declare that
they have neither seen nor are mindful of any infringement of the set of rules.
This can likewise incorporate, expecting them to uncover the points of interest
of all infringement of which they have learned. In addition, according to Pickett (2012, p.105), fraud policy should be easy to
be understood by the employees as it is set out for all the member of staffs of
an organization. Furthermore, as an example, (Pickett, 2012, p.106), states
that the fraud strategy should be set sturdy enough to handle with practical
problems that face the sort of business in the query, which includes bribery,
corruption, worker share and compliance issues whilst dealing with large
contracts. Therefore, setting code of conduct in businesses is essential as it
too can help in avoiding frauds.


Finally, the hiring of a Certified Fraud Examiner can be highly
effective in order to avoid fraud in businesses. According to Crumbley, Heitger
and Smtih cited in (Silverstone, Sheetz, Pedneault &
Rudewicz, 2012, p.4), forensic accounting is the action of figuring out,
recording, settling, extracting, rectifying, reporting, and verifying past
economic records or different accounting activities for settling contemporary
or potential prison disputes or the usage of such past economic statistics for
projecting future economic statistics to settle criminal disputes. Furthermore,
Silverstone, et al. (2012, p.92), states that forensic accountants are the
fundamental people in any fraud research because they apprehend accounting
structures and internal controls, and understand a way to hint the drift of
funds into, through, and out of the business enterprise. In fact, the forensic
accountants can, offer significant information and experience approximately fraud
that might not be available in some other place inside a business enterprises, (Biegelman & Bartoo, 2012, p.112) Consequently,
soliciting for a forensic accounting research designed to clear up the
suspicion of fraud in businesses can be appropriate, (Skalak,
Golden, Clayton & Pill, 2015, p.228). Hence, approaching Certified
Fraud Examiners can help businesses to go fraud-free.





Moreover, amongst the fraud prevention methods mentioned earlier, there
are again constructive techniques to tackle fraud in businesses. According to (Bierstaker, Brody & Pacini, 2006, p.529), the
auditors were beseeched to assess the effective techniques to strive against
the fraud. Although the auditors found out that hiring of forensic accountants
are not been utilized by many organizations yet those received the highest
ratings for their efficacy.



In conclusion, amongst other methods
like hotlines, reference checking and code of conduct, one of the most
effective methods to avoid fraud in medium to large businesses, in my opinion,
is to avoid it by hiring Certified Fraud Examiner also known as Forensic
Accountant. In fact, by approaching a forensic accountant a business could

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