The new year is a good opportunity for business leaders to make commitments to positively impact their organizations in the year ahead. Wondering where to start? Consider fraud prevention. Last year saw an explosion of fraud — with organizations sustaining total losses of more than $3.1 billion, according to the Association of Certified Fraud Examiners […]
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The new year is a good opportunity for business leaders to make commitments to positively impact their organizations in the year ahead.
Wondering where to start? Consider fraud prevention.
Last year saw an explosion of fraud — with organizations sustaining total losses of more than $3.1 billion, according to the Association of Certified Fraud Examiners (ACFE) 2024 Occupational Fraud Report. Between the change in administrations, the rise of cybercrime, and the increased adoption of AI, 2025 is sure to be another eventful year in the security space as well.
Below are three “resolutions” leaders can make in 2025 to help prevent organizational fraud.
Karen Skuse is a partner in the advisory & consulting group of the Bonadio Group. She is responsible for growing the firm’s fraud and forensic services and solutions practice.
1. Make Honesty and Integrity Your Core Values
Setting the correct “tone at the top” of an organization is foundational to building an ethical organization and preventing fraud. When management lacks honesty and integrity, employees are likely to follow suit, increasing the risk of fraud. However, when executives lead with honesty and integrity, it sets a behavioral standard for the entire organization. Furthermore, a culture of integrity also enhances trust among employees, clients, and stakeholders, creating long-term value for the company.2. Develop an Anti-Fraud Strategy
A strong anti-fraud policy sets a tone of zero tolerance, which will be essential to mitigating fraud. According to the ACFE 2024 Fraud Report, the presence of anti-fraud controls is associated with lower fraud losses and quicker fraud detection. Furthermore, ACFE reported that providing anti-fraud training for employees cut fraud losses in half. Developing a formal anti-fraud policy, implementing anti-fraud training, and conducting formal risk assessments are all recommended to keep pace with new risks. However, for organizations that may lack the necessary resources, hosting confidential fraud hotlines and/or web reporting methods is a great first step to combatting fraud. Nearly 50 percent of fraud is detected by tips, more than half of which come directly from employees. Having a medium for employees to submit anonymous tips, whether through a website or phone hotline, is crucial to mitigating fraud and a great way to capitalize on the top way that fraud is detected.3. Foster a Culture of Accountability
When leaders do what they say they’re going to do, and encourage others to do the same, even when it’s hard, they set the tone for accountability. Encouraging employees to hold themselves and each other accountable creates a sense of shared responsibility, making it harder for fraudulent behavior to go unnoticed. Unfortunately, as teams expand and shift to remote work, maintaining oversight and fostering accountability becomes more challenging. Therefore, establishing internal controls is a necessity. A good internal-control system should have two different types of control activities — preventive and detective. Simply establishing these internal-control systems isn’t enough, however. Organizations should conduct periodic assessments of internal controls to identify areas that require improvement or adjustments. The bottom line is that organizational-fraud prevention starts with leadership. If executives are unwilling to invest in necessary anti-fraud controls at even the smallest levels, they create a culture that invites fraud, waste, and abuse. Business leaders must take the initiative to implement strong anti-fraud policies, set ethical standards, and foster a culture of accountability. These efforts will not only protect the organization from financial losses, but also promote a sustainable, fraud-resistant workplace. By making these “resolutions” part of their ongoing business strategy, leaders can build an organization that is resilient to fraud and poised for long-term success.Karen Skuse is a partner in the advisory & consulting group of the Bonadio Group. She is responsible for growing the firm’s fraud and forensic services and solutions practice.