Fraud Prevention and Detection Plan. Accounting, Finance, SPSS Essay

Fraud Prevention and Detection Plan
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Fraud Prevention and Detection Plan
Preventing and detecting fraud is an important aspect of any organization due to the negative repercussions associated with the fraud. To prevent and detect fraud, organizations need to have a plan.
Key Elements
Some very important elements should be included in the plan. As Tamas, Petrascu, and Toader (2018) reveal, internal audits and internal controls have become the key elements in any anti-fraud programs or mechanisms. Internal audits are essential in assessing fraud risks and fraud prevention and detection (Tamas, Petrascu, & Toader, 2018). Internal audits also evaluate the relationship between risks and internal controls. It is crucial for the plan to encompass frequent and unexpected audits so that minor issues that can escalate to full-blown fraudulent activities are identified early enough. Further, internal controls, which are the plans put in place by the organization to protect it from fraud, are a key element in fraud prevention and detection plan. For example, clear separation of roles and responsibilities is an internal control that organizations put in place to ensure that employees do not have excessive control of assets or finances. The plan should clearly describe such internal controls.
Also, fraud risk assessment is an important element that should be included in fraud prevention and detection plan. According to Kaplan and Cherry (2018), risk assessment entails evaluation of the internal controls and procedures that have been put in place by an organization. This evaluation allows the organization to identify weaknesses or loopholes which employees, the management, and/ or outsiders can capitalize on to perform fraudulent acts against it. A plan that contains the fraud risk assessment element ensures that weaknesses are identified and amended immediately, thus safeguarding the organization from fraud.
Senior Leadership Support of a Fraud Prevention and Detection Plan
It is important that senior leaders at Innovative Hockey Gear, LLC support the fraud prevention and detection plan. Senior leaders have a crucial role in supervising or monitoring the existing controls and mechanisms in fraud prevention. In many cases, a lack of effective monitoring by senior management contributes to fraud within organizations (Tamas, Petrascu, & Toader, 2018). Also, the support of senior leadership is essential in setting the right tone about how serious the organization is about preventing and detecting fraud. Middle and low-level employees need to see that senior leaders are taking charge and leading by example. When employees feel that senior leaders are unconcerned, they will not take fraud prevention and detection seriously.
As revealed by Petrascu and Tieanu (2014), fraud has some severe repercussions not only on the organizations affected but also on the entire economy. Failure to support such a plan to prevent and detect fraud would affect the organization in several ways. One, it would result in direct financial loss. According to Wells (2017), most fraud cases cause a huge loss to investors since organizations lose billions of money every year. Innovative Hockey Gear, LLC is not a...