Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance, 2nd Edition

APPENDIX

ACFE Fraud Prevention Checklist1

The most cost-effective way to limit fraud losses is to prevent fraud from occurring. This checklist is designed to help organizations test the effectiveness of their fraud prevention measures.

1. Is ongoing anti-fraud training provided to all employees of the organization?

• Do employees understand what constitutes fraud?
• Have the costs of fraud to the company and everyone in it—including lost profits, adverse publicity, job loss and decreased morale and productivity—been made clear to employees?
• Do employees know where to seek advice when faced with uncertain ethical decisions, and do they believe they can speak freely?
• Has a policy of zero tolerance for fraud been communicated to employees through words and actions?

2. Is an effective fraud reporting mechanism in place?

• Have employees been taught how to communicate concerns about known or potential wrongdoing?
• Is there an anonymous reporting channel available to employees, such as a third-party hotline?
• Do employees trust that they can report suspicious activity anonymously and/or confidentially and without fear of reprisal?
• Has it been made clear to employees that reports of suspicious activity will be promptly and thoroughly evaluated?

3. To increase employees’ perception of detection, are the following proactive measures taken and publicized to employees?

• Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?
• Does the organization send the message ...