42. Internal Control and Safeguards

• Things to consider to prevent fraud in the organization:

  • Analyze the mindset of management.

  • Never let one person have too much control.

  • Does personnel take vacations?

    • Reluctance to be absent could indicate fraudulent activities. Most banks require certain personnel to take vacations because fraud can often be detected simply by having someone else take over a person's duties for a few days.

• See also: Recognizing the Red Flags of Fraud article by Donna Davis, Ethics Director at Northrop Grumman Electronic Solutions.