Intermediate level · Module 4: Financial Controls and Fraud Prevention · Lesson 3 of 3
Fraud Red Flags and Response
Recognise warning signs of fraud and error, and respond properly.
In this lesson you will
- Identify fraud red flags
- Respond to suspected fraud appropriately
Key concepts
red flagsghost employeesduplicate paymentswhistleblowing
The lesson
Common red flags: missing documents, round-number payments, the same supplier always winning, employees who never take leave, ghost employees on payroll and duplicate invoices.
Simple analytics help: sort payments by supplier and amount to spot duplicates; compare payroll with staff lists.
If fraud is suspected, preserve evidence, report through the agreed channel and do not confront or accuse without proper investigation.
Step by step
- Review a payment list for red flags.
- Compare payroll with the staff list.
- Document findings.
- Write a response procedure.
Practice activity
Complete the controls improvement plan with a fraud response procedure.
Expected result: A plan addressing identified weaknesses with a clear response procedure.
Check your understanding
-
Name two fraud red flags.
Show answer
Missing documents and duplicate invoices, among others.
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What should be done first if fraud is suspected?
Show answer
Preserve evidence and report through the agreed channel.
Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.