Once a fraud has occurred and a preventive solution has been developed, the solution should:
The correct answer and explanation is:
Correct Answer:
Be implemented and monitored continuously.
Explanation:
When a fraud has been identified and a preventive solution is created, the next essential step is to implement and continuously monitor that solution. Implementation means putting the developed control or policy into action so that it can actively prevent similar fraud from occurring again. However, simply installing the solution is not enough. Fraud risks evolve as technology, processes, and business environments change. Therefore, the effectiveness of the preventive measure must be regularly assessed and adjusted as necessary.
Continuous monitoring includes reviewing the performance of the control, checking for any weaknesses, and making necessary updates. For example, if the solution involves software controls, these must be updated to protect against new fraud tactics. If it involves staff procedures, employees must be regularly trained, and compliance must be evaluated. This proactive approach helps to ensure that the organization stays ahead of potential threats.
Moreover, continuous monitoring serves as a deterrent. Employees or outsiders who may be considering fraudulent actions are less likely to act if they know strong and active controls are in place. It also helps in early detection of any attempts at bypassing the controls, allowing the organization to act before any significant damage occurs.
In addition, data gathered through monitoring can help refine the solution over time, increasing its efficiency. If a control is not performing as expected, adjustments can be made based on real-time information. This approach promotes a culture of accountability, integrity, and constant improvement within the organization. Implementing and continuously monitoring preventive solutions is essential for long-term fraud risk management and the protection of company assets.