Business

Thursday February 19, 2009

CIMA: SMEs need to step up vigilance on fraud risk


KUALA LUMPUR: Businesses, particularly small scale, need to step up their vigilance on fraud risk in times of economic stress, according to the Chartered Institute of Management Accountants (CIMA).

As recent high-profile cases have centred on multinationals, small and medium enterprises (SMEs) might not realise that they were often more susceptible to fraudulent practices, it said.

SMEs could be hit by proportionately higher losses, which could prove crippling in the current economic climate, CIMA said in its “Fraud Risk Management: A Guide to Good Practice” report.

The guide was intended to arm management accountants with guidance and case studies on how to prevent, detect and combat internal fraud, it said in a statement yesterday.

“Despite the serious risk that fraud presents to business, many organisations still do not have formal systems and procedures in place to prevent, detect and respond to fraud,” CIMA’s innovation and development specialist, Helenne Doody, said.

While no systems was completely foolproof, there were steps that could be taken to deter fraud, Doody said, adding that CIMA’s guide should prove valuable.

CIMA’s approach is being endorsed by the Chartered Management Institue (CMI) following the publication of data which revealed low levels of trust within British organisations coupled with fears over financial management capabilities.

“Fraud can be stopped if robust detection procedures are in place. However, prevention is about more than procedure as it centres on attitude,” said CMI’s director of policy and research, Petra Wilton. — Bernama

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