Organizations implement fraud control policies to ensure safe-keeping of their financial assets and insider knowledge. Fraud control policies allow organizations to have the power to investigate and possibly sue those suspected of fraud.

An employee’s status at the company does not exempt them from the policy; every employee will be held accountable for any action that takes place. Along with employees, any shareholders, consultants, vendors, contractors or outside agencies/companies working with the organization will be held responsible for any irregularity discovered.

Example of a Fraud Control Policy

Management is responsible for detecting possible fraud and also for taking the appropriate actions to halt the crime. Employees are expected to report fraud they witness or believe to be happening.

Fraud is the "intentional, false representation or concealment of a material fact for the purpose of inducing another to act upon it to his or her injury." Fraudulent acts include but are not limited to: misappropriation of funds, securities, or supplies, disclosing confidential information, destruction, removal, or inappropriate use of records, equipment, etc., and insider trading.

Common Fraud Cases

Fraud cases usually involve asset misappropriation, corruption, and/or financial statement fraud. Asset misappropriation is when an employee steals or reveals private information held within the company. Persons involved in corruption influence business deals or transactions with their power and/or status. Financial statement fraud occur when information is omitted or data is falsely represented.


Any person who reports suspected fraud, or is suspected of fraud, remains anonymous. All information pertaining to the fraud case will be kept confidential, and will only be exposed to management and any attorney working on the case. Confidentiality agreements protect the employee from libel and slander, and the company from potential civil liability.

Should I Consult an Attorney?

If you operate a business, you should consider developing fraud control policies. An experienced employment lawyer or business lawyer can help you develop the best polices for your business.

If you have been accused of violating a fraud control policy, you should contact an attorney to ensure that your rights are upheld.