Designing procedures which prevents and detect attempts from both insiders and outsiders of the organisations to commit fraud is important to any organisation. A deterrent against fraud is important mainly because of the financial losses organisations will experience in the case of fraud, but also to protect against the negative media attention, especially in organisations which deals with public subsidies and money gains from membership.

Donald R. Cressey – an American sociologist and criminologist - have been attributed with the invention of the theory of the fraud triangle. It works with three factors which are present in every situation where fraud is committed.

1. Motive (or pressure) – The need for committing fraud (Need for money etc.)
2. Retionalization – The mind-set of the fraudster that justifies them to commit fraud.
3. Opportunity – The situation that enable fraud to occur (Often when internal controls are weak or non-existent)

Any organisation who wishes to prevent fraud should make sure that that these three factors are not present at the same time within the organisation. Most organisations will focus on detection eliminating the third factor, both due to legal requirements but also as it is the only factor over which the organisation has full control. 

Downloads:

Fraud policy.doc

Example of Fraud prevention policy from Rugby Footbal Union.

CCPR - Policy on fraud.doc

Alternative example on fraud prevention policy from Sport and Recreation Alliance.