Finance Sample Paper on Mandatory Vacations to Detecting Fraud

Mandatory Vacations to Detecting Fraud

There are several fraudulent behaviors committed by employees in an organization. Most of these frauds go undetected and lead the organization to incur huge losses. There are several methods currently applied by organizations to investigate and prevent fraud committed by their employees. One of the ways that organizations use to find out whether an employee is committing fraud is mandatory vacations (Petrucelli, 2013). Several organizations have imposed policies require their employee to take mandatory leave of a given period to help in detecting whether the employee is involved in malicious activity. The leave period help the organization to carry out an internal audit and reconciliations to find any evidence of fraud especially for employees working in the finance department. If the records available do not reconcile, a flag is raised on the employee and investigation commence immediately.

In my organization, there are high chances of employees committing fraudulent activities such as embezzlement of the fund by finance officers and account clerks. Incidences of corruption are also likely to occur from the management and their subordinates, especially during procurement. One way to prevent and detect these types of frauds is to impose mandatory vacation period. Every employee will be required to take a two-week mandatory leave unexpectedly to give room for investigation. Mandatory leave will allow the backup employee detect any malicious activity in the position. Additionally, the mandatory leave will enable the internal auditors to carry out audits of books of accounts to see if they represent true and fair view of the organization transactions.

When a fraudulent activity is detected in employee’s duties and responsibility, a thorough investigation should be conducted and appropriate action taken on such employees. Mandatory vacation has proved to be successful way to prevent and curb fraud in several organizations and therefore it is likely to work in this organization (Petrucelli, 2013).

Reference

Petrucelli, J. (2013). Detecting Fraud in Organizations: Techniques, Tools, and Resources. John Wiley & Sons.