Question

Compare and contrast the various types of proactive fraud prevention measures an organization could implement to minimize the risk of fraud. Fully describe how each measure might prevent fraudulent activities. Include your recommendation for the most effective measure for a church to implement and include a biblical application to support your recommendation(s).

Answer 1

We have seen a huge increase in various cases of fraud coming in light since last few years. Let's discuss a few ways through which we can prevent frauds:

Segregation of duties - This is one of the most important and most visible forms of control seen in organizations of all size and scale. Under this type of control measure, the access to take important decisions that consider important resources are divided into more than 1 employee. In simple words, a single valuable asset is not under an access of a single person. This prevents fraud and misuse of resources of the organization.

Internal Control - Just like segregation of control, multiple other process controls are designed and operated within the organization to handle fraud issues. Here are some most commonly used internal controls - documentation, CCTV cameras, defined process flows, biometric access, purchase order systems etc.

Disclosure of Interest - Nowadays, new organizations are encouraging a disclosure of interest policy where all the employees are mandatorily required to compulsorily disclose their personal interest (if any) in any of the forthcoming decision. And where any such, disclosure is made, such a person isn't allowed to access his rights to vote in that decision.

Related party transaction - All the employees of the organization are discouraged to enter into any form of transaction or any contract with their family members, friends etc. because it might affect their prudence for the business decision.

For a church, the most effective measure would be to use segregation of duties and other similar internal control mentioned above.