Fraud is a major problem facing organizations today, and many business owners, executives, and shareholders believe that fraud is a random occurrence, striking unfortunate organizations by pure happenstance. In reality, there are 3 factors present in every fraudulent situation, and there are straightforward actions that can be taken to shield an organization from the risk of fraud. This is the essence of fraud deterrence.

Fraud deterrence is rooted in strong internal controls. Recent studies concluded that nearly 90 percent of fraud could be avoided by an appropriately defined and rigorously enforced structure of internal controls. Additionally, recent regulatory guidance for companies producing public financial statements reinforces the role of strong internal controls in the financial reporting process.

In addition to safeguarding the assets of the company, internal controls also are responsible for ensuring compliance with regulations and the efficiency and effectiveness of operations. Controls guide all participants within an organization in the conduct of their duties, and help management extend their wishes and objectives throughout the organization. An effective control structure helps participants understand the risks associated with the decisions they face in their daily jobs, and the communication channels to seek additional guidance.

Our team of professionals has tremendous expertise with the analysis and improvement of internal control structures within organizations ranging from small private ventures, to large public companies. This expertise was harnessed by the National Association of Certified Valuation Analysts when they were seeking to implement a new professional certification in fraud deterrence: the Certified Fraud Deterrence Analyst. We wrote the five day training materials for the course used to train every CFD in the United States.