Handling fraud in the workplace

Fraud of any nature is a serious issue at the workplace. No employee worth his salt is expected to resort to commit fraud, no matter what the provocation. It is a matter of major concern for both the employee and the employer. If the employee shows himself to be someone who cannot be trusted; the organization that is not able to or keen to deal with fraud projects itself poorly to the outside world and will have its reputation dented.

What is fraud and why is it committed?

It is difficult to define a fraud, because like sin, it is subjective. It is not in the same league as crime, which goes by strictly defined legal parameters. In a broad sense, we can understand fraud as an illegitimate act that causes harm to the organization in one or another way. An act of financial misappropriation is an example of fraud. There could also be a kind of fraud in which, for instance, data is stolen. This could result in indirect financial loss to the organization. There are other ways by which an employee can harm the organization, such as by bringing disrepute to it, but this does not constitute fraud.

Although people with criminal tendencies that have access to finances commit fraud, some others may do it out of a sense of revenge. They may feel like hitting back at the organization as a form of retaliation for any wrong on its part, either real or perceived.

How to organizations handle fraud?

First, the organization has to have a clear definition of which kind of acts by an employee or the management constitutes fraud. It has to enforce this by keeping vigil on its finances. Regular audit is a healthy practice, and it pays, because irregular audits or audits carried on at very infrequent intervals may not help the company detect a fraud.

The investigation into the fraud has to be thorough, objective and professional. Those found guilty should be handed exemplary punishment, but in a suave manner. It should be of such nature that the employee should be given the chance to offer his side of the story. A highhanded approach will not be a good example of the company’s attitude.

If it has some doubt about a person’s integrity, it should make sure that such a person is not kept in a position in which fraud is easy to commit.




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