Mostorganization face the risk associated with loss of property inunknown circumstances. Most of the theft activities are propagated bythe persons who are employees of the organizations. It is,therefore, important to address preventive control measure to limitthis problem. The preventive measures are, creating a positive workenvironment, putting in place internal controls, recruitment checksand educating the employees as seen in the article, “Managingthe risk of fraud and misconduct,”authored byTimothy P. Hedley and Richard H. Girgenti. The article targetsinvestors and entrepreneurs since they are bound to face many risksin their field thus must know how to handle them. Although controlmeasures have been put in place to prevent theft in mostorganizations, loopholes such as inadequate supervision, poor hiring,and misplaced trust lead to an environment which is ripe for fraudand internal theft.
Preventingemployee theft starts with creating a positive environment where therelation between the employee and the employer is friendly andprofessional. This encourages employees to obey rules, procedures andto act accordingly with the best interest of the company at heart.Enabling environment is that in which there is free communicationbetween staff and management for better results. Where there is fearamong employees there, lack open line of communication thus nocorporation to reduce the problem.
Intrying to mitigate the risk of employee theft the organization shouldimplement internal controls to limit employee theft[CITATION Ric111 l 1033 ].Internal controls ensure employees compliance with rules andregulations of the organization. To ensure effective and efficiencyof policies separation of duties is key among employees. Differentemployees should record and process one transaction. Besides accesscontrol is important in an organization. It involves restriction toaccess to financial and physical assets as well as an accountingsystem. Finally, authorization control should be in place. Involvecoming up with policies that determine how transactions areinitiated, approved, booked and reviewed.
Pre-employmentbackground checks are essential during the hiring process to try andcurb the unethical behavior of stealing at the start. Recruitmentchecks identify dishonest employees. It is the most comprehensive wayof ensuring the organization has competent employees. Although itfaces resistance from dishonest employees, who ignore attempts toundergo the vetting procedures pre-employment screening criticallyinvestigates and ensures that only the competent employees are hired.It verifies accuracy of claims made by the employee and helpsdiscover criminal incidences of a worker.
Toreduce theft risk in the organization, employees should undergo atraining process ethics education. Creating awareness about policiespreventing fraud and strategies to prevent theft and company losses.Training of employees concerning internal theft is key managementrole. Employees should receive training on this topic and warned ofthe consequences of criminal behaviors. Employees are to be madeaware of what is expected of them when caught in theft acts. By doingthis cases of theft in a company are reduced or fully eliminated.
Performingaudit regularly and others by surprise. Unannounced financialexamination of financial reports limits the probability of committingfinancial theft. Fraud assessment helps identify vulnerabilities atan early stage and also assess the effectiveness of current existingcontrols. Therefore management is to keep a watchful eye. Whencontrols are frequently checked, they will be truly effective.
Mostorganization are often found in situations where the employees turnto the thieves of the company. These are behaviors that may haveeffect in the going concern of the company if the risk is notaddressed properly. In handling the risk during primary stages suchas during hiring, it turns to be much effective as a culture ofcompetence is set in the mind of the employee. The organization RiskManagement department also should also put in place internal controlmeasures to ensure that the property of the organization is wellprotected.
Girgenti, R. H., & Hedley, T. P. (2011). Managing The Risk Of Fraud And Misconduct: Meeting The Challenges Of A Global, Regulated, And Digital Environment. New York: McGraw-Hill. Retrieved from https://assets.kpmg.com/content/dam/kpmg/pdf/2012/11/kpmg-book-managing-risk-fraud-misconduct.pdf
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