AIS_Wk3Discussion - usually deeply involved in the...

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Week 03 Discussion - Fraud Prevention To prevent fraud by employees, companies must utilize internal controls and security. Many times smaller companies do not have the Resources to implement these and rely on the integrity of its employees. Do you feel that it is effective for a company to rely on the integrity of its employees? Why or why not? Can a company ensure the integrity of its employees? Explain. In my opinion, I do not feel that it is effective for a company to rely on the integrity of its employees. Smaller companies that do not have the resources to implement internal controls and procedures are less likely to recover from fraud. This is due to the belief that it is too expensive to purchase theft insurance, due to their limited capital. The owners of small companies are
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Unformatted text preview: usually deeply involved in the business, and rely on that involvement to prevent fraud. Small companies often times rely on employees, friends, family members, and other trusted individuals because they are not large enough (do not have enough resources/employees) to provide the adequate division of responsibilities or install a system of checks and balances. Since these small companies rely heavily on personal trust and relationships, they are more vulnerable to fraud. This can make the size of theft losses that are discovered highly disproportionate to the size of the company. Small companies can ensure the integrity of their employees by performing background checks before hiring them on. They can also encourage integrity and honesty by their own conduct....
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