What is Fraud Training for Employees?

Compliance Knowledge Base | Fraud Awareness

Posted by: Morgan Rennie Published: Tue, 11 Sep 2018 Last Reviewed: Tue, 11 Sep 2018
What is Fraud Training for Employees?

Fraud can be prevalent in the workplace and business; employees need to be well trained and vigilant to prevent fraudulent offences from occurring. Company compliance with the UK Fraud Act 2006 is essential if a company wants to be well regarded in the business world, as it is admirable if an organisation and its employees are well committed to preventing fraud. Fraud training for employees is therefore necessary, as it will enhance the awareness of employees and enable them to achieve compliance with the UK Fraud Act 2006.

To establish the necessary and most effective training for employees an organisation needs to understand where the company's weaknesses are. According to the Fraud Triangle Theory, if there is an opportunity present within an organisation, then this will encourage an employee to commit fraud. If a company commits to fraud prevention then it will mitigate any opportunities present which would encourage fraudulent activity.

Fraud can assume many different forms, and an employee needs to be aware of when they are potentially at risk to protect the organisation that they are a part of. Fraud can be conducted by an employee through travel and subsistence fraud, receipt fraud, exploiting assets and payment fraud. Through training employees, they will become aware of how they need to conduct their behaviour in a business and will benefit from being aware of what to look out for regarding fraudulent activity.

What is Fraud Training for Employees?

What are the potential repercussions that a company will face if they don't train their employees in fraud awareness?

Employee fraud, whether conducted consciously or if an employee has failed to prevent fraud from occurring, can cause severe repercussions for the organisation as a whole. A report conducted by KPMG, a professional service company, found that 26% of fraud perpetrators are employees, and therefore this demonstrates that there does need to be a concerted effort to ensure employees have fair and ethical business conduct.

Clear and precise internal policies must be implemented to promote a culture which is anti-fraudulent within a company. This environment will hold employees accountable for their actions and ensure that they are encouraged to comply with fair and ethical business practice.

In 2015 Carolyn Harris, an MP from Swansea East, was exposed to the fraudulent activity conducted by one of her employees, Jenny Clarke. Jenny Clarke was an office manager for the MP and was accused of faking her boss' signature on an Independent Parliamentary Standards Authority form in order to confirm her own pay rise to £39,000 a year and a reduction in the number of hours she would work a week. Jenny Clarke denied that she was guilty of forgery and fraud at Cardiff Crown Court. Considering this investigation reached the Crown Court, the case demonstrates how seriously employee fraud is taken, as it essentially compromises a business' integrity and reputation.

If you want your organisation to promote a fair and ethical business culture, then you need to implement the necessary procedures, starting with training for employees. This will allow an organisation to collectively conduct anti-fraudulent policies and business practice.

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