Conducting an exercise to assess fraud risk may seem to be a low priority (and somewhat unexciting)...
The Transition of Employee Fraud within an Organisation
The Extended Reward System
The table below illustrates how fraud develops in an organisation without effective controls and proper organisation culture in place. The organisation that does not set boundaries effectively exposes itself to actions by employees that may threaten the entire business.
| Basic |
Fringe Benefit |
Perk |
Fiddle |
Fraud |
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| Salary & wages |
Company car, expenses payments etc |
Nicer office; use of phone and photocopier at work for personal reasons; leave early on Friday etc |
Padding expense accounts; stock shrinkage; shortchanging customers etc |
Significant stealing of funds, property or services; corruption; fraudulent financial reporting etc |
||
| Official |
Official, or unofficial but accepted |
Unofficial and unacceptable, but some may be tacitly accepted within limits as part of cost of doing business |
Unofficial and unacceptable |
|||
| Legal |
Illegal |
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| Helps business |
Threatens business |
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