Combating Internal Fraud

Organizational fraud, said to be costing on average about five percent of revenue, is by definition difficult to detect. There is no typical fraudster profile. On the contrary, fraudsters often have the ability to “build a false wall of integrity around themselves with the hope that your level of skepticism is reduced enough to be manipulated and fooled,” writes Jonathan T. Marks,, a partner at Baker Tilly. Nonetheless, he says, effective internal controls can “minimize the opportunities to commit fraud, or at least catch any fraudulent activity sooner.” In this post he lays out some of the essential features of an internal control system.