Blog Post

Look Beyond the Auditing and Compliance Departments — Fraud Awareness Training is for All!


Mary Breslin, CFE, CIA
President, Verracy

Why doesn’t every organization implement fraud awareness training for all employees? That’s a question I get asked a lot; it’s also a question I ask when I speak. Having investigated fraud and taught fraud prevention for years, I think there are a number of reasons — and right now it’s more important than ever for companies and organizations to have a more integrated fraud awareness program in place.

The pandemic disrupted every organization in some way. Organizations reinvented ways of conducting business, granted exceptions to processes and policies, extended unusual permissions and responsibilities to employees, and changed oversight and governance approaches. Simply put, every organization changed, and with change comes increased risk. That risk could be temporary while the change is normalized or it could be permanent.

According to the latest report from the ACFE and Grant Thornton, The Next Normal: Preparing for a Post-Pandemic Fraud Landscape, fraud examiners are already seeing an increase in fraud and expect that the trend will continue. Organizations need to re-evaluate their risks and find ways to address the new situations they find themselves facing. Change in processes have forced organizations to modify or eliminate preventive controls resulting in new opportunities for wrongdoing. To counter the increased opportunity for fraud, organizations must increase their efforts in monitoring, detection and deterrence. The greatest deterrent an organization can have is creating a culture of fraud fighters.

Now is the ideal time to turn every employee into a fraud fighter and create a fraud prevention culture. I have been a longtime advocate of fraud awareness training for all employees. Every employee should receive fraud awareness training on a regular basis. Not some employees — all employees.

But not all organizations are on board yet for a variety of reasons. Some of the counter arguments to providing fraud awareness training for all I’ve heard include:

  1. It’s too expensive!

  2. Fraud training will teach employees how to commit fraud.

  3. Employees already have enough common sense to say something when they see something and we have a hotline!

  4. The hotline is enough.

  5. We provide fraud awareness training to the key individuals and/or departments; that’s good enough.

Let’s look at each one and debunk them.

1. It’s too expensive!

Now that the entire world has learned how to operate virtually, the argument that training is too expensive loses a lot of its validity. There are still costs associated with training, but now there are more creative approaches to “training.” With all the technology used for communication so organizations can operate remotely, why not leverage those tools to start a messaging campaign around fraud awareness? Providing employees fraud facts, examples and reminders of what to do if they see something suspicious can be done through a simple weekly instant messaging campaign. Make the campaign interesting and include trivia contests with small awards. Constant messaging campaigns work because it shows the employees that the organization is concerned about fraud and wants them engaged in the fight.

2. Fraud training will teach employees how to commit fraud.

Okay —I’ll admit that it is possible. Maybe a couple of individuals would go that route. But even if that happens with a small group of individuals, the benefit of turning the rest of the employee base into fraud fighters greatly outweighs any risk. Just think how quickly that small group of bad actors would be caught when everyone else is empowered to fight fraud!

3. Employees already have enough common sense to say something when they see something and we have a hotline! 

Common sense does not equate to fraud awareness. The average person is not even comfortable with the word “fraud.” Ever ask someone if they were aware of any potential fraud and watch them immediately start to squirm? The word fraud makes people uncomfortable because they aren’t always sure what exactly constitutes fraud. Where is the line between waste and abuse and fraud?  Surprisingly, it can vary from organization to organization — you must define it for them.

Additionally, humans naturally want to believe what they are told and want to believe the people in their lives, professionally and personally, are good people. When you combine an individual’s uncertainty over what constitutes fraud with their natural desire to trust people, it becomes understandable why more people don’t speak up when fraud is occurring. They need fraud awareness training to give them the vocabulary and confidence they need to report when they see fraud.

4. The hotline is enough.

It’s not. It’s important, but it is not enough. People will only use the hotline if they are comfortable doing so and many are not comfortable (See point number 3 above). If you want people to report a potential fraud, they need to know what “fraud” is in a way they can understand — and they have to know that fraudsters can be people they like.

5. We provide fraud awareness training to the key individuals and/or departments; that’s good enough.

Again, it’s not. Why leave something so important to just a handful of people? These key individuals and departments should be receiving training that goes beyond basic fraud awareness and delves into prevention and detection methods. They need additional anti-fraud training beyond that of every other employee. Their specialized training does not negate the benefits of training all employees on fraud awareness.

Most employees aren’t going to commit fraud — they are good, honest people — so let’s empower them to become fraud fighters. For years the ACFE’s Report to the Nations has stated that approximately 5% of revenue is lost to fraud in an organization. Imagine what your organization could do with that 5% if they got it back through fraud prevention and deterrence. And what is more of a deterrent than every employee being able to confidently identify and report fraud thanks to their training-based knowledge? Fraud awareness training is not just for some — it’s for all.

SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners

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