ALL COMPANIES ARE EXPOSED to the business war of fraud and other losses at all levels of their operations.

The most significant are costing billions of dollars, yen, francs, pounds… annually, without being detected becauseof inadequate monitoringsystems.

In spite of companies being faced with hostile take-over bids, cost cutting, cartels and other major disruptions, still the greatest losses are because of fraud, often on a colossal scale, big enough to sink somesmaller countries’ economies.

Such fraudsare not always perpetrated fromoutside the organisation — many successfulfraudsters were respected and trusted employees, often at a senior level.

Worldwide, the risks of fraud apply equally to every company imaginable.

Everyone has something to lose: a business method, a recipe for success, a product design, an award-winning advert, a valued customer, a key employee, a comprehensive database, a sound bank balance.

All can be enticed, stolen, bribed, wheedled, cajoled or mugged away.

And whenever this happens it is usually sharp practice or, to put it more succinctly and accurately — fraud.

One newish field of endeavour which is very susceptible to fraud is the internet.

Many organisations, banks included, have insufficient security to prevent massive fraud.

Knowledgeable dealers can whittle away millions of pounds through clever accounting twists, hackers can access personal banking and payment records, organised criminals can extract details of people without their knowing and, at a lower level, countless millions of workinghours are lost through ‘cyber­ing’, net-based and other uter-d riven time-wasting has replaced the more ional skyves for the rk-shy. This is still fraud.

Although it is a popular elief that most people are intrinsically honest, recent research has shown that around75 per cent of employed people in urope and he USA have defrauded e their employers at som time.

Some of this fraud may e regarded as minor but it impractical to define an cceptable level of theft.

However, a great proportion of the people who defraud their employers do so because they feel that they can get awaywith it.

If security is lax, checks on their work infrequent and management apparently oblivious to the dangers of fraud, there can be a feeling on the part of many employees that their employer deserves what he gets and a consequent willingness to be part of a general free-for-all.

Therefore, any sensible management will put in place as many obvious deterrents as possible, consistent with the principle that work and business should not be hindered.

Employees will then realise that the company policy is one of honesty backed up by intelligent and sensible security measures.

Everyone should be urged to be vigilant, especially to external intrusions into company-secure areas.

Computer security practices and the protection of information and physical security seem obvious but cracks can appear and infiltrators can get in.

The money managers must be constantly alert for irregularities and unexplained movements.

Surveilliance and countersurveilliance measures can be installed.

It is clear that the environment must be right and conducive to high security, but no matter how hard the company tries to repel boarders, some clever people will get in and get away with it.

Beware! The fraudsters are about.

SOURCENOTE: David Price is
Managing Director of Network Security Management Ltd and
Chairman of Communications Audit UK Ltd