As we observe International Fraud Awareness Week, we’re asking: is it time to go back to basics?

Prevention is not a one-time event; it is a continuous process of aligning company culture with rigorous operational oversight. Below, we explore five core areas where organizations can strengthen their defenses and mitigate the risk of misconduct.

Company Culture – The Importance of Tone at the Top

A strong ethical culture is the bedrock of any anti-fraud framework. It starts with leadership setting a clear, consistent example of integrity. Employees are keen observers; they take their cues from what leaders do, not just what they say. When leaders bypass controls for the sake of expediency or fail to manage consequences for misconduct, the control environment weakens, and fraud risk rises.

Organizations should ask:

• Are there consistent consequences when misconduct occurs, regardless of an employee’s rank?
• Do employees feel comfortable challenging a senior leader if they believe a process is being circumvented?
• How regularly and authentically do leaders communicate expectations around accountability?

Takeaway: The strongest anti-fraud control is not a policy. It is a culture where accountability applies to everyone.

Trust is a Relationship, Not a Control

Trust is essential for a healthy workplace, but in a professional services or corporate environment, it should never replace objective monitoring. We often find that “trusted” employees with long tenures gradually receive more responsibility and system access with less oversight. This over-reliance creates a vacuum where red flags—such as a refusal to take leave or an insistence on creating constant urgency—go unnoticed.

Organizations should ask:

• Are potential red flags being overlooked because we “trust” a specific individual?
• Which processes appear controlled by system functionality but lack independent verification?
• Are we relying on an individual to the point where a lack of segregation of duties has become the norm?

Takeaway: Trusting an individual cannot override the necessity of proper, independent controls.

The Power of Segregation of Duties

The opportunity for fraud increases significantly when a single person can initiate, approve, execute, and ultimately conceal a transaction. In lean environments, roles often become consolidated, leading to dangerous overlaps—such as the same person creating a supplier and releasing the payment. Fraud becomes much harder to commit when critical responsibilities are divided among independent parties.

Organizations should ask:

• Are the individuals who maintain the payroll records the same ones processing the payments?

• Are employees who create/modify a vendor/supplier also able to approve invoices and release payments?
• Are bank approvers and releasers different individuals?

• Are inventory counts performed by personnel independent of those who maintain the records?
• Are reconciliations reviewed by someone other than the person making the payments?

Takeaway: Fraud becomes much harder when critical responsibilities are divided between independent individuals.

Eliminating Hiding Places in Reconciliations

Reconciliations are designed to ensure accuracy and completeness, yet they are often where fraudulent or erroneous transactions are hidden. Accounts that are not reconciled timely, or long-standing “unreconciled” items that are simply carried forward, are major red flags. If nobody is questioning the “noise” in a suspense account, an organization may be missing more than just an accounting error.

Organizations should ask:

• Are we comfortable that all accounts which should be reconciled (e.g. suspense accounts) being reconciled?
• Are we actively investigating reconciling differences, or have we become comfortable with unexplained items remaining outstanding?
• Does the person performing reconciliation have the knowledge and access to independently investigate discrepancies?
• Are reconciliations supported by appropriate documentation and evidence of review?

Takeaway: If nobody is questioning old unreconciling items, they may be hiding more than just accounting errors.

Bank and Payment Controls – The Last Line of Defense

The payment process is where fraud transforms into a tangible monetary loss. Once funds leave the bank account, recovery is often difficult, if not impossible. Robust bank controls—particularly around manual payments and changes to beneficiary details—are essential. Fraudsters often exploit the “manual” capture of data to misdirect payments to fictitious accounts.

Organizations should ask:

• Are adequate controls in place to verify a change of bank account details with a vendor?
• Who is authorized to create, approve, and release payments, and is that authority appropriately segregated?
• What independent review exists for manual payments before the money is released?

Takeaway: The payment process is where fraud becomes a monetary loss. Strong controls can stop it before funds leave the organization.

Moving Forward

Transactional excellence is achieved when doing business “the right way” is embedded into the DNA of the organization. As you reflect on these fundamentals during International Fraud Awareness Week, consider whether your organization’s “basics” are as strong as you assume they are.

The biggest fraud losses often come from the controls everyone assumed was working. Need a closer look? Our team can help.

Reach out to Shari Schindler, Louise Jordaan, or Minette Manna to discuss how we can help you assess your fraud risk and strengthen your internal control framework.

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Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of StoneTurn Group, LLP, Province, LLC, or their affiliates. This article is provided for informational purposes only and does not constitute legal, financial, or other professional advice.