Empowering Employees To Prevent Fraud In Nonprofit Organizations

This Article examines the significant problem of fraud within nonprofit organizations and demonstrates that current anti-fraud measures do not adequately reflect the important role employees play in perpetuating or stopping fraudulent activity. Psychological and organizational behavior studies have established the importance of (1) participation and (2) peers in shaping the behavior of individuals within the organizational context. This Article builds on that research and establishes that to successfully combat fraud, organizations must integrate employees into the design, implementation, and enforcement of anti-fraud strategy and procedures. Engaged, empowered employees will be less likely to commit fraud and more likely to dissuade their peers from fraudulent behavior. After examining the theory underlying the proposed approach, this Article sets forth directions and specific suggestions for designing an anti-fraud program that empowers employees.

Table of contents

Corporate Fraud Exposed uncovers the motivations and drivers of fraud including agency theory, executive compensation, and organizational culture. It delves into the consequences of fraud for various firm stakeholders, and its spillover effects on other corporations, the political environment, and financial market participants.

IS YOUR NONPROFIT VULNERABLE TO FRAUD? Fraud or embezzlement discovered within a major corporationultimately leads to front-page scandals and a few raised eyebrows.But the mere suggestion or evidence of fraud within a nonprofit cancause irreversible damage to its reputation, its support base, and,eventually, its very existence. Preventing Fraud in NonprofitOrganizations is the proactive manual your organization needs todetect fraud and prevent it from affecting your organization'sbottom line and name. Brimming with details of hundreds of actualfraud and embezzlement schemes, it provides specific, practicaladvice on strengthening the areas in which your nonprofit may bemost vulnerable. This hands-on guide shows nonprofit accountants, CFOs, financialconsultants, board members, and managers how to: * Know the four consistent areas of high risk * Thoroughly evaluate their organization's system of internalcontrols * Assemble a fraud examination team * Document a fraud action plan * Expose weaknesses that could lead to fraud * Take corrective action to reduce the possibility ofvictimization Fraud deterrence is not exclusive to large corporations.Recommended reading for nonprofit professionals, Preventing Fraudin Nonprofit Organizations will motivate executives to take a freshand intensive look at their organization's practices and act toprotect from financial dishonesty.

This book provides a complete guide on fraud hotlines. It is designed to educate readers with respect to the history, purpose, operation, use and utility of fraud hotlines. It also equips readers with the knowledge to create, analyze and assess the performance of fraud hotlines.

Law plays a key role in determining the level of entrepreneurial action in society. Legal rules seek to define property rights, facilitate private ordering, and impose liability for legal wrongs, thereby attempting to establish conditions under which individuals may act. These rules also channel the development of technology, regulate information flows, and determine parameters of competition. Depending on their structure and implementation, legal rules can also discourage individuals from acting. It is thus crucial to determine which legal rules and institutions best enable entrepreneurs, whose core function is to challenge incumbency. This volume assembles legal experts from diverse fields to examine the role of law in facilitating or impeding entrepreneurial action. Contributors explore issues arising in current policy debates, including the incentive effect of legal rules on startup activity; the role of law in promoting or foreclosing market entry; and the effect of entrepreneurial action on legal doctrine.

Nonprofit organizations are at an increased risk for the occurrence of fraud due to their inherently trusting nature and the limited availability of resources for fraud prevention measures. Because charitable organizations rely on positive public image and donor perceptions of organizational effectiveness for continued funding, it may be difficult or impossible for a nonprofit to remain financially viable once fraud occurs. We conduct an experimental investigation with potential donors to determine which actions improved the likelihood that they would contribute to a nonprofit organization following a material misappropriation of assets fraud. Modifying and enhancing board of director oversight had the highest and only statistically significant positive effect on potential donations. Moreover, firing an Executive Director, who was not involved in the fraud, reduced both the likelihood and amount of planned giving.