Nobody wants to believe that their company is losing significant revenue to fraud. Understandably, organizations don’t want to spend scarce resources managing risks they don’t consider legitimate. With regulators and prosecutors increasingly holding executives accountable for fraud prevention, however, there’s a strong incentive to replace the old refrain of “no fraud here” with the more proactive “not on my watch.”

Here is a cautionary note: As much as the internal audit profession should be applauded for reaching beyond its accounting roots to strengthen interdepartmental relationships through “soft” skills, such as interpersonal communication, it is critical to maintaining a clear line between improving communication and compromising assurance. While there is a trend toward “consultative” audits, stressing that while surprise audits may sometimes be seen as running counter to an organization’s culture, these types of audits can be an effective fraud deterrent when used in a targeted manner and focused on perceived problem areas or intransigent business units or geographies. That’s not to say such audits can’t be handled with dignity and respect but merely that we need to ensure that when adding the soft skills, we as auditors don’t lose our edge.

Check out these KLplus CPE courses related to fraud:

• Introduction to Fraud (KLplus CPE Course): In today’s environment, professionals like yourself working on the front lines of companies need to have a heightened skepticism and awareness regarding fraud. All organizations are susceptible to fraud. Would you know how to recognize red flags indicating possible fraud? Upon completion of this course, you will be able to identify the necessary conditions for fraud to occur, identify the fraud trends surveyed from the past Global Reports to the Nations published by the ACFE, identify different categories of fraud, and identify ways to prevent and detect fraud.
• Segregation of Duties Principles (KLplus CPE Course): Segregation of duties is a critical concept that is important for internal auditors to understand. Upon completion of this course, you will be able to define "segregation of duties," identify the purpose for establishing and monitoring segregation of duties, and identify segregation of duties issues.