ABSTRACT
Detecting fraud in a timely manner can help to minimise losses and also increase likelihood of recovery for frauds that have been identified. There are two efficient and effective ways of detecting fraud: training employees to recognise and respond to the red flags of fraud; and proactively seeking out the red flags. Behavioural red flags can be either objective or subjective. Typical objective behavioural red flags include: obvious excessive wealth or gross over-spending; increasing debts and lack of wealth; long absences from work or failure to take leave; changes to work patterns; long hours after normal business hours; and the override of normal controls and procedures. Open communication within the organisation should always be the primary channel for fraud detection. The organisation should aim to make discussions around the red flags of fraud and concerns about fraud risks part of the culture.
