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There are several ways to prevent fraud and one of the important tools are internal controls. Internal Controls are not static but they are tools that evolve with time when the technology, business, and fraud environment changes related to industry practices, competition, regulation, legislation, and present economic conditions.

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The Concept of Internal Controls and Fraud

Though no company has the strongest internal controls is immune to fraud, strengthening the internal control processes, policies, and procedures make companies much less attractive to internal as well as external criminals trying to exploit the weaknesses of internal control. Strengthening internal controls can be rarely enhanced through a process, it rather includes a comprehensive review of the different risks faced.


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The existing internal controls that are already in place can prevent fraud from happening. The internal control systems can be conducted based on location or can be broken down on an individual basis. The companies that have strong internal controls can view a process holistically and can find a team approach highly valuable.

The Internal Control Systems that Prevent Fraud

Anti-fraud controls have a vital role to play in the fight of an organization against fraud. The presence of all these mechanisms does not ensure that fraud shall be prevented but the investment and commitment of management to target detection and prevention measures shall send out a clear message to vendors, employees, customers, and others regarding the anti-fraud instance of an organization.

If the internal controls are present in an organization then they can protect the organizations under fraud. For each control examined, the organizations that have proper internal control experience smaller fraud and can detect frauds quickly compared to organizations that lack this control.

The top internal controls that can reduce fraud are stated in our Internal Controls and Fraud assignment help desk as follows:

  • An internal audit department
  • A code of conduct
  • Management review of internal processes, controls, transactions, or accounts
  • Management certifications of the financial statements

These internal controls were linked with more than 50% reduction in fraud duration and fraud losses. Management reviews and internal audits are mechanisms that are used to detect fraud and therefore the relation with minimized fraud duration and losses are the reason. Management certifications and codes of conduct are less directly related to fraud detection, however, both mechanisms can help to develop a foundation for a better anti-fraud culture.


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Classification of Internal Controls

Internal Controls are comprised of control activities including documentation, authorization, security, reconciliation, and segregation of duties. They are divided into a detective and preventive activities. These are stated in our Internal Controls and Fraud homework help service.

Preventive control activities deter fraud and errors from occurring and it includes authorization and documentation practices. Verification of expenses and authorization of invoices are internal controls. Additionally, preventive internal controls are restricting physical access to inventory, equipment, cash, and assets. Detective controls are the backup methods that can catch events or items, which have been missed. The most crucial activity is reconciliation.

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