You may not have given a lot of thought to crime and fraud occurring within your business. After all, you trust the people who work for you, and with you – right?

Well, here’s some sobering statistics that may make you think again:

  • The estimated cost of fraud in Australia is $8.5 billion annually;
  • The average fraud in Australia and New Zealand amounts to $3 million;
  • 60% of fraud cases take over three years to detect;
  • 61% of fraud cases result in no recovery; and
  • 50% of Australian businesses experience economic crime.

So, what’s surprising, especially when you consider these figures, is the fact that many Australian companies don’t have adequate measures in place to protect against fraud occurring.

Vishal Modi, Director of Audit and Assurance at Hill Rogers explains “Whilst fraud is a risk organisations cannot totally remove, it is possible to put in place strategies and procedures which will lessen the likelihood of it occurring and if not, help reduce its impact. If you don’t acknowledge that fraud happens, you are not going to find it.”

“The two key factors in reducing fraud were found to be an ethical organisational culture and strong internal controls.”

Here, Vishal shares 10 ways in which businesses can help protect themselves from fraud:

Implement a Code of Conduct. Be clear about the ethical values of your organisation and the behaviour you expect from your people. A way to do this is by establishing a Code of Conduct. A Code of Conduct sets the standards of ethical behaviour expected of all stakeholders – everyone from the board to management, contractors, employees and volunteers. Its policies should cover things including gifts and gift registers, conflicts of interest, use of credit cards, entertainment and travel expenses, transparent recruitment processes, discipline and termination policies.

Have clear, written financial procedures. It’s important to have financial controls that all staff can follow. Have multiple checks and balances in place to limit the risk of fraud and ensure that there are multiple people responsible for authorising, implementing and reconciling financial transactions. For example, always have two cheque signatories; two people involved in handling and recording any money received; and set clear limits on purchases and other transactions.

Employ robust human resources procedures. Always carry out rigorous reference checks and follow strict recruitment procedures when hiring personnel. Scrutinise the past employment history of prospective employees thoroughly to avoid unknowingly employing someone who has a history of fraud.

Outline clear financial responsibility.Any people with financial responsibility must be competent and understand fully their role and responsibilities. Make people accountable and do not take anything for granted.

Develop a fraud prevention policy.One that sets out exactly who in your organisation must do what to prevent, identify and respond to incidents of fraud.

Review your online controls. In recent years we’ve seen a rise in online fraud, involving both financial (e.g. payroll and credit card transactions) and non-financial (e.g. confidential client records) data. Ask yourself: how easily can my systems be hacked?  Do I have similar controls in place for electronic transactions as I do for other transactions? How often do I change my organisation’s internet banking passwords?

Ensure employees take annual leave each year. If you have an employee that doesn’t want to take leave, and is secretive about their work, it may be wise to carry out an internal audit to ensure that there isn’t any fraudulent activity. Requiring your people to take leave is an effective safeguard to minimising risk and also ensuring knowledge succession planning.

Limit cash handling. Having large amounts of cash around can be a temptation too hard to resist for some. So limit the amount of money that is handled by your employees.

Regularly check your accounts.Review your accounts regularly and identify anything that does not make sense. If you see a variation in spending or income, ask questions.

Understand the importance of reporting fraud. Frauds are typically discovered by tip-offs and internal controls, which means it’s important to foster a culture where people are encouraged to speak up. Implement a Whistleblower Policy that guarantees people who speak out against suspect behaviour feel safe.

No matter what type – or size – of organisation you are, fraud is a very real danger. That’s why it’s important to seek reliable advice on how your organisation can implement effective internal controls and manage your fraud risk. If you would like more information on how Hill Rogers can help you mitigate the risk of fraud, please visit us at

For more information, please contact Vishal Modi here.



This article is based on a conference paper for CEOs & Chairs, given by the author, a director of Hill Rogers, and contains extracts from the ACNC’s guide to fraud prevention.