Fraud prevention in a bad economy

September 2012 Cyber Security

Writing on fraud prevention in the workplace today is no small challenge. I could write pages on the security plans and assessments that need to be done to ensure that the recommendations are in line with the corporate image of a business as well the efficiency levels required to make a business profitable. This unfortunately will not always cover the more real aspects of what employees are experiencing in the difficult financial times most people find themselves in today.

Recently the Kansas City Business Journal reported on an intriguing study about the importance of corporate image. In light of heightened concern about ethical standards and conduct in the business and professional world, Fleishman Hillard, a public relations firm, and the World Economic Forum, surveyed 132 delegates about corporate reputation. Seventy-seven percent of the business leaders responded corporate reputation – its need to maintain a strong, positive image – has become more important recently.

This increased focus on reputation has stimulated a renewed interest in integrity. Integrity is defined as a strict adherence to a moral code of ethics. Whether we realise it or not, we all have a code of ethics we live by; unfortunately, many have no strong moral foundation.

In 2001, George Barna conducted research on this subject. When asked what basis they use to form their moral choices, 44% of those responding indicated that they go with whatever seems most pleasing or satisfying to them. Approximately 17% rely on the family values passed down to them, and another 17% act based on making others happy, to minimise conflict.

These approaches are frightening. Take basis number 1, for example. Imagine if all corporate executives made decisions based on what is pleasing to them personally. Is that not why an alarming number of once highly esteemed corporate executives now find themselves under indictment for criminal and unethical practices?

For those who rely on family values, the second most popular choice, to assess that impact all you have to do is consider the movie, ‘Pirates of the Caribbean.’ In the film, the pirates acted according to a code of ethics that had been passed on to them and that they passed on to others – but I would not want them as neighbours!

In addition, for those who want to avoid conflict, or make others happy, the end result likely will be that the strongest individuals rule – because they exercise control over those who try to please others so they can reduce conflict. There is a basic principle: If you try to make tyrants happy, they will certainly take advantage of your weaknesses. This does not sound like a way to minimise conflict.

Any risk assessment and advice on loss prevention should cover the following aspects and each area should be unpacked to understand the actual risk the organisation faces, the strengths or weaknesses in the existing system and then recommendations on how to manage risk going forward.

* Physical security.

* People security – including employees and third-party employees.

* The security of systems and procedures.

* Technology.

* The management of security.

iFacts has made a basic online risk assessment available free of charge and it can give you an indication of risks your home, business or complex may face. Please visit www.orangebusinessboost.co.za to assess the questionnaire.

For more information contact iFacts, +27 (0)82 600 8225, jenny@ifacts.co.za, jenny@orangebusinessboost.co.za



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