Is the Chief Executive officer Fraudulent?

Is the Chief Executive Officer Fraudulent?

One of the best ways of detecting fraudulent behavior is to have detective controls that are visibly in place, such as cameras.  This is a strong method, simply because every employee is knowledgeable that they are being watched and would have to think twice about committing any fraudulent act.  This should be also used in conjunction with preventive controls, these work well hand and hand with detective controls, because it enhances the effectiveness of a fraud risk management program; what this does is provide the evidence that the preventative control is working as it should be and it will identify any fraud that is occurring, or occurs (Managing the Business Risk of Fraud, 2010).  It is true that the detective controls can show or provide the evidence that there is fraudulent activity with in the midst, or that it has already occurred, but they aren’t truly intended as a way to prevent fraud.  

        Although an organization can try, there is truly no way for an organization to entirely eliminate the risk of fraud.  There is always going to be a person who is motivated to commit a fraudulent act, just sitting awaiting that one opportunity that fraud risk management slips up and they are able to swoop in; whether if it’s manually overriding the system or a control, or coercing someone else to do it, it is always possible to do one way or another.  So, with the detection tools, they should be adaptable, flexible, and constantly able to change so that they are able to keep up with the different risk changes that develop (Managing the Business Risk of Fraud, 2010).  It’s true that every organization, non-profit and for profit are prone to fraud, therefore it is not very cost effective for an organization to try to eliminate all the risks of fraud.  Sometimes a company can chose to have controls that only detect, instead of prevent, to cut down on costs, that is why it is so important that employees in high management positions can be trusted, such as the Chief Financial Officer, because they may have to sometimes take on a prevention role, that way would be much more cost effective.

...