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The world's business trends are evolving with the times in an effort to increase company profitability and market competitiveness. (Albretcht et al., 2016). However, the changes also bring with them a number of problems that raise the likelihood of company failure. In my situation, the misuse of corporate resources is the main issue plaguing the business. According to Cormer & Stephens (2004), the companies' assets include cars, chairs, tables, and amenities like rooms, laptops, internet, kitchenware, etc. The method used to determine their wrong usage or management was through the investigation of their useful life in the firm. The findings
were that the assets had low economic life and high repair and maintenance costs. Some like vehicles had an economic life of 3 years and high costs of repair and maintenance. There were cases where firm cars were used for personal duties. These showed that the employees' misused the assets of the company (Turner, 2015).
Business is faced with many problems in their operations. These issues arise from either internal or external business environment of the firms. The primary goal of the company is to make profits and enable the firm to undergo perpetual existence in the market when having a competitive edge over its competitors. Since organizations are composed of various stakeholders, problems are unavoidable as the different parties have their interests that they expect to fulfill by the group. However, this is not practical and possible for the firm to satisfy the needs of all the stakeholders. Therefore, teams have rules and regulations that govern operations of all stakeholders. Managers have a duty of ensuring that business succeeds through the achievement of the set goals and objective as established by the shareholders. The company has numerous risks that may result in their failure if not well looked. The success of a business entails overcoming the many difficulties to be the market leader and be able to make profits. Some of the risks include competition, insecurity, corruption, fraud, etc. (Jones, 2017).
Fraud is a deliberate act done to deprive the victim his or her legal right. Fraud in businesses is frequent as the people attempt to have financial or personal gain form their actions. It can be massive resulting to not only economic loss but also according to its severity caused failure of the business. Therefore, fraud can lead to the closure of any business and the managers must pay attention to ensure the stakeholders do no fraudulent activities. As a counter fraud specialist, I have witnessed different kinds of frauds happening in the organization and tried various means to curb the criminal activities (O’Gara, 2004). These paper will identify the multiple fraud levels in my team and how they can be mitigated so as not to result in losses for the firm. These paper also will look at the various types of fraudulent activities I have witnessed, how they can be measured efficiently and try and offer possible solutions that can be used (Petrucelli, 2013).
The report will be divided into four sections which are an introduction which entails the aims of the paper. Main body which will be in parts outlining the frauds I have observed in the organization, their levels, how they can be measured and lastly how they can be solved. These will be the part of the primary information regarding the research. The conclusion will follow after that containing what key points I have covered in the report and my findings and discussions. Finally, the paper will have my recommendations regarding the matter of fraud in the organization.
Types of Fraud in an Organization
According to Four Types of Fraud That Can Shake Your Organization to Its Core. (n.d.), there are various types of fraud that can occur to an organization caused by the stakeholders. They include:
Financial Statement Fraud
According to Button, & Gee, (2013), these scam entails manipulation of the books of account to enable individual steal funds in a firm. The finance records are wrongly recorded to allow people steal money without being noticed. It aims at concealing fraudulent activities done by employees. These can be measured in the annual report auditing by auditors. Managers should continuously have auditors check their books of accounts and advice accordingly in case of any discrepancies (Rezaee, & Riley, 2010).
These are whereby the employees who are given the mandate to manage the assets plan to steal from the organization in means which are fraudulent. They may arrange with criminals to seize the assets and make it look like real theft or even claim assets are lost, yet they are the ones stealing from the organization. Such employees may be stealing the assets of the firm to sell them to customers at low prices and get the cash. Managers should ensure the security of their properties and investigate cases in which assets with employees get lost. There should be penalties for the employees when assets disappear in their hands. These would make them more responsible and careful (Stamler, Marschdorf, & Possamai, 2014).
Skimming of Cash and Cash Larceny
These are used by employees to enable them to get the money intended for the firm by conspiring to take the money before it enters into the firms accounting system. These may be through selling products off records at higher prices and indicating regular prices in the books. These can result to decline in the market of the firms' products as the customers view them expensive. Managers should carry checks to see how the employees sell its products by either sending their people to buy the products and report the experience. If it is a big company with many branches, they can purchase the items themselves and see whether the staff manipulate prices (Koletar, 2003).
Misuses of Company Assets
It is the usage of firms' assets in the wrong manner from the stipulated leading to the assets getting destroyed earlier than expected. Firms indicate guidelines on how the employees are supposed to use its assets like vehicles, furniture, computers, etc. These aims at making the assets have a long economic life and avoid unnecessary expenses as a result of repair and maintenance. However, some people neglect the company guidelines and use the assets for their gains. Vehicles can be used to carry a passenger or carry family member to personal activities like weddings. Computers can be taken by workers to home risking them being stolen or even destroyed which may slow down work progress.
The firm can measure the misuse of its assets by checking the levels of repair and maintenance and also their economic life. Frequent repair expense shows that the assets are wrongly used by the employees which eventually leads to them destroyed faster. Checking the two elements by the manager can explain how the employees are using the assets. Additionally, surprise check should be done by the management to ensure the employees use the assets for their intended purpose (Bishop, 2015).
Theft of Intellectual Property and Trade Secrets
Competition in the globe is on the rise and firms may use illegal way to gain a competitive edge in the market. Intellectual property and trade secrets are the sole rights that firm having regarding a particular way of doing business which is unique. These are achieved through the creativity and innovation of the staff to enable them to find a unique way to compete in the market. These are viewed as a secret to the firm thus not told to the competitor. Sometimes staff can be paid by competitors to disclose the information. These are wrong as it brings about unfair competition. Managers, therefore, to ensure protection of its innovation and secrets should employ loyal employees. To check the leakage of its innovations they can check the production of competitors and see how similar they execute their activities (B., M., G., & J., 2013).
Conclusion and Recommendation
Assets are compliments in a firm to ensure better execution of services with ease and achievement of the set goals and objectives. Businesses can have vehicle to transport employees and products to the market. In most cases, these cars are not allowed to carry non-staff persons. Some companies might provide food for the staff hence have kitchen and specialized cooks. Chairs, computers and other assets in the firm are requirements by the employees to execute their duties. The above issues are the major fraudulent activities that the employees can do infirm to get personal gains. The main problem my firm faced was the misuse of its assets. The employees used the assets for private jobs which were not stipulated by the organization. Organizations have rules and regulations regarding the usage of its properties, but some of the employees' have not put them into considerations. Computers were carried by workers home resulting to some being stolen or stolen. The employees misused furniture in the firm by using it for illegal purposes leading to it getting destroyed like chairs let out in the open after work hence being damaged by the weather. However, after keen observation, I have noted that my firm is losing high amount of finds in new purchases, repair, and maintenance of its assets (Boone, 2012).
The management must ensure fraud levels in the organization is low. The only reason to ensure this is by providing employees follow the organization rules and regulations strictly. Deviance from the norms should mean heavy penalties. These would create fear among the employees and make them shun fraudulent activities. Employees determine the success of the firm and managers should treat them well to make them feel part and parcel of the company hence be loyal. These can be achieved through better pay and conducive working environment and terms (Cascarino, 2013).
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Tunley, M. (2015). The accredited counter fraud specialist handbook. Chichester: Wiley.
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