Strengthening fraud prevention in small businesses: An analysis of effective accounting and auditing practices

Elisha Oloruntobi Adeboye *

Department of Mathematics, Faculty: Computer Science and Quantitative Methods, Austin Peay State University, United States of America.
 
Review
International Journal of Science and Research Archive, 2024, 13(02), 590–595.
Article DOI: 10.30574/ijsra.2024.13.2.2160
Publication history: 
Received on 28 September 2024; revised on 09 November 2024; accepted on 11 November 2024
 
Abstract: 
Fraud poses a substantial threat to small businesses, with potentially devastating consequences due to their often-limited resources and lack of sophisticated fraud prevention measures. In the absence of adequate defenses, small businesses are particularly vulnerable to financial losses, operational disruption, and reputational harm. This article examines critical accounting and auditing practices that can strengthen fraud prevention efforts, focusing on practical strategies tailored to small business environments. Research indicates that nearly 5% of annual revenue is lost to fraud worldwide, with small businesses experiencing outsized impacts. By implementing robust internal controls, conducting regular audits, and embracing technology-driven solutions, these enterprises can significantly reduce fraud risks. The paper discusses specific types of fraud, such as asset misappropriation, financial statement fraud, and corruption, all of which are prevalent in small businesses and can often go undetected without structured preventative measures. Leveraging real-time monitoring, data analytics, and employee training, businesses can establish a proactive stance against fraud while fostering a culture of transparency and ethical behavior. Drawing on insights from major fraud studies and frameworks, including the COSO model and ACFE reports, this analysis provides small business owners and stakeholders with actionable recommendations for building resilient fraud prevention systems. This study underscores that with targeted resources and awareness, small businesses can achieve a higher degree of financial integrity and stability, positioning themselves for sustainable growth and trust within their communities.
 
Keywords: 
Fraud poses; Businesses; Analysis; Auditing practices
 
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0