Articles Archives – Polonious

How can financial audits help?

by Eleftheria Papadopoulou | Mar 24, 2023 | Articles

Financial audits are becoming increasingly important for businesses of all sizes. According to the Association of Certified Fraud Examiners, investigations have identified an astounding $4.7 trillion in financial losses due to fraud and mismanagement over the past year. This number is expected to continue to rise as financial problems and schemes are increasing. Financial audits can help businesses identify key issues and areas for improvement, allowing them to take preventative measures before losses occur.

Financial auditors have become proficient at using various analytical tools and data sources to uncover complex financial relationships between entities. With the right team of financial experts, companies can ensure that their finances remain secure and that any potential issues are addressed swiftly and effectively.

What is a financial audit?

A financial audit is a comprehensive and independent examination of an organisation’s financial statements, records, transactions and internal controls. Conducted by a qualified and impartial auditor, the main objective of a financial audit is to determine whether the financial information presented is accurate, reliable, and in compliance with relevant financial reporting standards, such as the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS).

Businesses should consider conducting audits if they want to protect their interests from risks such as financial crime (money laundering, bribery, corruption etc.). A thorough financial audit can help uncover any fraudulent activities, allowing a company to take appropriate action against those responsible. It can also identify any potential weak points in the company’s financial processes that criminals or careless employees could exploit.

A financial audit can also reveal oversights and problems that may have gone unnoticed for some time, allowing companies to make better decisions about how best to allocate resources for maximum benefit.

Benefits of financial audits

A financial audit serves several critical purposes for businesses, some of which include:

Enhancing credibility: A financial audit provides credibility and assurance to the stakeholders of an organisation, such as owners, investors, lenders, regulators and customers. By verifying the accuracy and reliability of the financial information, audits foster trustworthiness and transparency in the organisation’s financial dealings.

Compliance and regulatory requirements: In many jurisdictions, businesses are legally required to undergo financial audits, either as a part of statutory requirements or in accordance with specific industry regulations. Financial audits ensure that businesses adhere to these requirements and maintain the necessary documentation for reporting purposes.

Identifying inconsistencies and irregularities: Financial audits help in detecting discrepancies, errors, potential fraud and mismanagement within an organisation’s accounting and financial systems. Through the identification of these issues, businesses can take necessary corrective actions to prevent future occurrences and safeguard their financial integrity.

Improving internal controls and risk management: During the course of an audit, auditors may identify weaknesses or deficiencies in an organisation’s internal controls and processes that could increase the risk of fraud or financial misstatement. These findings can assist management in strengthening their risk management strategies and the overall efficiency of their financial operations.

Facilitating decision-making and planning: Accurate and reliable financial information is essential for informed decision-making, strategic planning and resource allocation within a business. An audit provides management with valuable insights into the organisation’s financial health, enabling them to make more informed decisions and drive the company’s growth and profitability.

Types of financial audits

Each type of financial audit is used to detect a certain problem. However, it might identify more than one. The most common types are:

-Forensic financial audits

-Analytical financial audits

-Compliance financial audits

-Fraud prevention financial audits

Forensic financial audit

Forensic financial audits can help businesses uncover financial misconduct and fraudulent activities such as embezzlement. A forensic financial audit is used by companies to look into their financial statements and it helps them make sure that their money is earned legally without any other underlying activity. This means they check that no one is stealing or misusing company funds and that all transactions are done correctly. They also check that everyone pays the right amount of taxes, that they are getting what they paid for when making purchases and more. In other words, a forensic financial audit helps companies keep track of their money so it can be used rightfully.

These specialised financial audits leverage sophisticated techniques and tools to identify financial risks and vulnerabilities that may have gone unnoticed by traditional methods. Lawyers also use them during litigation proceedings involving the company’s finances in order to provide evidence relating to the case at hand.

Analytical financial audits

An analytical financial audit is an examination of a company’s financial records. It typically involves looking at the company’s income, expenses and other financial activities to find any areas that need improvement or potential risks. Analysts use this information to make informed decisions about how the company should manage its finances in order to become more successful. They may also use this data to help detect fraud or identify opportunities for cost savings.

The data collected from an analytical financial audit can also be used to create realistic budgets and forecasts for the future. With accurate budgeting and forecasting, companies can plan for potential risks and prepare for unexpected expenses. By using smart strategies, companies can save money in the long run by avoiding costly mistakes due to mismanagement or fraud.

An analytical financial audit also provides valuable insights into a company’s financial health. Through such an examination, analysts are able to uncover trends in a company’s spending habits which can then be used to identify potential sources of revenue. It also enables managers to have greater visibility into the true cash flow within a business, allowing them to make better decisions with regard to investments and other expenditures.

Compliance financial audits

Compliance financial audits are in-depth examinations of an organisation’s internal financial records and processes to assess whether they are compliant with applicable laws and regulations. These audits are conducted by outside regulatory bodies, law enforcement agencies or internal auditors. Compliance financial audits can be complex and time-consuming undertakings that require specialised skills, knowledge, and expertise.

The purpose of a compliance financial audit is to identify any irregularities or discrepancies in financial operations and practices within an organisation. During the course of a compliance audit, investigators may review documents such as contracts, invoices, bank statements, account ledgers, tax returns, business licences, and other financial records. Investigators may also interview staff members to obtain additional information about the organisation’s operations and activities. Once completed, the audit report will include a detailed review of the evidence collected and findings from the interviews. The report can then be used to determine any corrective action that may be necessary to ensure ongoing adherence to relevant laws and regulations.

In addition to legal compliance requirements, many organisations also use compliance financial audits as part of their internal risk management process. This helps them identify potential areas of risk and resolve them so they do not impact their overall performance. Compliance audits can also help organisations develop new policies or procedures to more effectively manage their finances and better meet their business goals. By taking proactive steps such as these organisations can avoid costly fines or penalties resulting from non-compliance with current regulations.

Fraud prevention financial audits

Similarly to forensic audits, fraud prevention financial audits are a useful tool in protecting individuals, businesses, and organisations from financial losses due to fraudulent activities. A fraud prevention financial audit is a comprehensive process that involves the analysis of collected data and evidence to determine whether a person or organisation has engaged in any form of criminal activity. These audits may involve analysing bank records, financial documents, tax returns and other information related to the suspected fraud in order to uncover potential wrongdoings.

The primary goal of these audits is to identify, prevent, and deter fraud before any real harm can be done. Typically conducted by a professional investigative firm or law enforcement agency, these audits often require special training and expertise in order to be effective. Fraud prevention financial audits usually require both quantitative and qualitative methods for collecting evidence, which includes examining records such as bank statements, credit reports, loan applications, customer feedback surveys, customer complaints and other relevant documents. Additionally, they may include interviews with witnesses or suspects in order to gain more insight into the suspected fraudulent activities. In some cases, investigators will also conduct undercover operations or use specialised tools like computer forensics to further their understanding of the case.

Once all information has been gathered, it will be assessed by experienced professionals who can accurately assess the likelihood that fraud has taken place. After being thoroughly reviewed, all evidence will be presented to the appropriate parties (law enforcement personnel) who can take legal action if necessary.

In these situations, it is very important that those conducting the audit have an excellent understanding of all applicable rules so they do not overstep their authority when taking action against wrongdoers. It is also essential that only verified facts are reported when filing reports on suspected fraudsters so as not to compromise any legal proceedings that may arise from them. With this knowledge, it is easy to see why fraud prevention audits are so important for organisations. It helps them detect unethical activities that could lead them to serious monetary losses or even criminal penalties.

Internal vs external auditor

An internal auditor is an employee of a company who is generally responsible for ensuring that the organisation’s financial and operational activities comply with internal policy, applicable laws and regulations. Internal auditors typically perform risk assessments and review data to identify areas of weakness or areas where fraud may be occurring. Their primary purpose is to provide assurance to management about the effectiveness of internal controls, accuracy of financial statements, and compliance with regulation. They do not certify financial statements or attest that they are free from material misstatement.

External auditors, on the other hand, are independent third-party professionals brought in to assess information related to a company’s finances and operations. Unlike internal auditors, their main goal is to provide assurance to stakeholders that financial statements are reliable and free from material misstatement due to fraud or error. The external auditor will analyse evidence obtained from both the internal audit process as well as their own procedures so that they can issue an opinion on whether the financial statements present a true and fair view of the company’s financial position. External auditors have access to all personnel and documents within the organisation which enables them to provide objective opinions based on an unbiased review of evidence rather than relying only on information provided by management.

Remember

Internal and external audits can be very useful for your business. Conducting a financial audit is necessary even if there is not suspicion of misconduct. They can help the business improve in many areas and allow for greater credibility and growth. At Polonious, we help our customers conduct numerous types of financial audits. We assist them in streamlining the process and letting them focus on their tasks while we take care of the rest. Our goal is to increase the efficiency and effectiveness of the audit while minimising the costs for our customers. Do you want to know more? Reach out!

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6 Types of Interpersonal Conflict Employers Should Know About

by Muznah Naeem | Mar 21, 2023 | Articles

In many ways, interpersonal conflict is a normal, and even inevitable, outcome of human interaction – the daily collision of many different personalities, values, beliefs and habits makes it impossible for one to agree or get along with everyone they meet. However, when it comes to the workplace, managing the severity and frequency of interpersonal conflicts is necessary for the effective and cohesive functioning of the organisation.

Employers must make sure they are aware of the ways interpersonal conflict can arise and take shape amongst their workers – failing to do so can result in escalations of conflict which cause lasting damage to employee performance, relationships and teamwork dynamics.

interpersonal conflict is an inevitable aspect of human nature

Within moderation, interpersonal conflict can actually be healthy, helping employees to better understand each other and work towards more innovative and creative solutions. But whilst avoiding disputes is not the solution, learning how to fuel them towards a mutually beneficial outcome is not always easy, making the ability to recognise and address them a key skill for all employers and managers.

The 6 Different Types of Interpersonal Conflict

Interpersonal conflicts can come in many different forms – being able to distinguish and categorise them is important because this makes it easier to choose appropriate strategies to help resolve the issue.

There are six primary categories under which most interpersonal conflicts can be grouped. They include:

1. Pseudo Conflict

Pseudo-conflict is rooted in miscommunication – it occurs when an individual interprets the words, actions or behaviour of another individual in a manner that doesn’t align with the original intention. Take for example, an employee who completed a presentation for their coworker as a kind gesture, however, it is interpreted as an attempt to take over their project.

This misinterpretation can introduce stress in the relationship which can escalate if neither party addresses the issue. Whilst it may seem like a small issue initially, it can develop into more problems down the line when the two employees have to work together or within a team where their potential animosity can hurt communication, productivity and team culture.

Pseudo-conflicts also include interpersonal conflicts that occur when different opinions clash on a particular issue – for example, one employee thinks the team should present live but another believes that a video presentation is the better option. Essentially, pseudo-conflicts come down to perceptual differences between individuals and resolving them is generally quite simple- just taking some time to help the employees clarify their perspectives, communicate their needs and figure out where their aims align is usually enough because malicious intent is generally not involved.

2. Fact Conflict

Fact conflicts occur when two people disagree over the facts of an event, situation or idea. For example, one employee argues that an upcoming event is on a certain date and their co-worker argues it’s actually on a different day. In another case, an employee might argue that their research found a certain piece of information that is contradicted by the research of another employee. Because the interpersonal conflict in these scenarios relies on concrete information that can be verified, resolving them is a simple matter of checking the facts.

3. Value Conflict

Value conflicts can be a more difficult form of interpersonal conflict to navigate. They occur when two individuals have certain differences in their value systems (the set of beliefs and attitudes which govern the choices a person makes in all areas of their life). Disputes regarding values often occur regarding subjects that are generally controversial such as religion, abortion or alternative medicine. The reason why these can be difficult for employers to resolve is that one’s values are a deep-seated aspect of their identity and trying to reach a conclusion with which both parties agree is extremely difficult.

In the workplace, values can even shape how employees behave in subtle ways and this can make value-based conflicts hard to recognise sometimes – for example, consider two employees, one who likes to stay late and continent working and another who clocks out at 5 pm and turns off their emails for the evening. The former may think their co-worker is not hardworking and lazy whilst the latter may place a high value on their work-life balance and find the other overbearing. The real reason may be a fundamental difference in the values each individual has surrounding their personal time, workplace boundaries and career goals.

To address such issues, rather than trying to get parties to see eye-to-eye on the issue, it’s best to encourage them to recognise the values of the other person and accept that they differ from their own. Acknowledging and understanding another person’s opinion even when you disagree with it allows people to feel heard without creating cause for arguments.

4. Ego conflict

Ego conflicts are those when an argument between two parties turns into a matter of pride and winning the dispute becomes more important than understanding and listening to each other and the facts of a situation. They can turn hurtful quickly when the argument deviates from the topic at hand and turns personal, making the involved people defensive and more likely to say harsher things about each other. This also makes them one of the most difficult forms of interpersonal conflict for employers to navigate because they involve one’s sense of self-respect and dignity.

Interpersonal conflict can damage a team's relationship and productivity

Ego conflicts can be the outcome of other unresolved conflicts where resentment built up over time and can take form unexpectedly in situations where it may feel uncalled for. They can escalate further if individuals refuse to back down and ultimately really harm the ability of two people to work effectively together.

One way to help resolve the matter is to make sure that all parties have time and space to calm down and step away from the heightened emotions of the dispute and see things with a fresher perspective. Once the heat had died down, it’s useful to return the conversation to the initial cause of concern and go from there, mediating the conversation so it stays on topic, professional and relevant to the work being done.

5. Policy conflict

Policy conflicts arise between individuals who are both being impacted by a certain event or situation (e.g. being in the same team for a company project) and disagree on the implementation of a certain policy or procedure. This could be when a policy is being utilised to guide a task, make an important decision or solve a problem. Employees may disagree not only on which policy is being used but also on the way it has been interpreted and applied to their specific context.

Resolving this type of interpersonal conflict takes a combination of examining the policy to differentiate between the facts and the grey area, identifying areas of agreement and coming to a compromise as a team.

6. Meta Conflict

Meta-conflicts are essentially when people have disputes about their disputes – think phrases such as “Why do you never listen to what I’m saying?!” or “You always react like this, you’re impossible to talk to!”. Meta conflicts revolve approached and handled. When they occur, employers should take note and consider revisiting how the workplace is doing in terms of general communication and the effectiveness of its conflict resolution strategies – they may be due an update if you’re noticing an increase in meta-conflicts (or conflicts in general).

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To conclude, employers need to be able to recognise and distinguish between the different types of interpersonal conflict. While it may be an unavoidable aspect of human interactions, it can harm workplace dynamics and productivity if left to fester unaddressed. Polonious can aid employers invested in reducing the risk of interpersonal conflict in their workplaces by helping ensure procedural fairness and transparent decision-making in investigations.

What does a financial investigation reveal?

by Eleftheria Papadopoulou | Mar 17, 2023 | Articles

Are you thinking of conducting a financial investigation? With the potential financial losses that come with fraudulent activities, it may be worth investing in a trained professional to examine and assess your business’s accounting records. A comprehensive financial investigation will reveal any suspicious activity or discrepancies within the record-keeping system that could put your company at risk of large-scale loss. The results of the financial investigation can show companies what is really taking place inside an organisation. This will assist them in deciding on how to proceed and what steps they can take to protect themselves while growing and expanding.

What does a financial investigation entail?

A financial investigation is an inquiry into the financial affairs of a business. It involves collecting evidence and analysing information to determine if there has been any illegal activity or misappropriation of funds.

A financial investigation aims to uncover problems that may have occurred and to identify those responsible and hold them accountable. Financial investigators use specialised procedures such as forensic accounting and data analysis to trace money flows between individuals or entities involved in the case. They also look for discrepancies in documents related to the case including bank statements, tax returns, invoices, contracts etc., which could indicate fraudulent activity or potential violations of laws governing finances.

Because financial investigations are complex and require experience and knowledge, it is often required to hire a professional investigator who has the necessary expertise and resources for a successful investigation.

What can a financial investigation reveal?

Financial investigations are becoming increasingly important for identifying and preventing financial crimes. According to a recent survey, out of the companies asked, at least 50% of businesses had experienced financial fraud. Conducting an investigation can be a powerful deterrent against such criminal activity and shows stakeholders that the entity takes such matters seriously.

Financial investigations can be conducted for both criminal and civil matters such as fraud, money laundering, embezzlement, tax evasion and bribery. They can result in important findings about an individual such as a potential conflict of interest. This could indicate that the individual is not acting for the benefit of the business.

Financial investigations can reveal a variety of other issues that could otherwise go unnoticed. These include:

-Undisclosed liabilities or debts

Undisclosed liabilities or debts refer to financial obligations that an individual, company, or entity intentionally fails to disclose in their financial statements or reports. This is often a deceptive practice undertaken to hide the actual financial state or to avoid unwanted attention from regulators or stakeholders. These hidden liabilities can include outstanding loans, pending legal claims, or financial losses that have not been reported. Deliberately keeping this information from regulators can not only result in significant fines and sanctions but also put the credibility and future of the organisation at stake. In some instances, it may even lead to the dissolution of the company or criminal charges against the involved individuals.

-Identifying sources of income not reported on taxes

Identification of undeclared income sources is a crucial aspect in the fight against tax evasion, money laundering, and other financial crimes. Unreported income may arise from various sources, such as the sale of goods or services, rental income, investment income, unreported employee compensation or earnings from illegal transactions. Identifying and reporting these undisclosed sources of income is critical to ensuring tax compliance and preventing tax fraud.

-Tracing offshore accounts

Tracing offshore accounts is the process of uncovering hidden financial assets and transactions that individuals or corporations hold in foreign jurisdictions. Offshore accounts are commonly used for legitimate business purposes such as diversifying investments, tax planning or international trade. However, they can also be utilised to evade taxes, launder illicit funds, or conceal assets from legal claims or creditors. Investigating these offshore accounts often requires sophisticated forensic accounting techniques and extensive international cooperation, as the complex web of financial transactions may involve multiple jurisdictions, shell companies, and anonymous directors. The successful tracing of offshore accounts can lead to the recovery of assets, the prosecution of financial criminals and the reinforcement of global financial security.

-Reputation risk

Reputation risk is the potential threat to an organisation’s image, credibility, or overall standing in society and the market, resulting from specific events or actions. Reputation risk can arise from various reasons, such as financial scandals, regulatory violations, product safety issues, or unethical behaviour from senior executives. A damaged reputation can lead to a loss of customer trust, decline in market value, reduced access to capital, and increased scrutiny from regulators, all of which may severely impact an organisation’s stability and long-term prospects. Businesses should actively manage their reputation risk by maintaining robust compliance programs, transparent communication strategies and proactive stakeholder engagement to mitigate potential crises and uphold their reputation.

-Noncompliance with laws and regulations

Noncompliance refers to the failure of an organisation to adhere to applicable laws and regulations imposed by local, national or international governing bodies. Noncompliant behaviours can range from minor oversights, such as missing filing deadlines, to grave violations like facilitating money laundering or fraud. Noncompliance may result in civil or criminal penalties, including fines, sanctions, or even incarceration, depending on the severity of the breach. Repeated noncompliance can also damage a firm’s reputation as mentioned above, leading to additional costs and loss of business opportunities. To avoid noncompliance, organisations must have comprehensive compliance systems, regular audits, and clear communication channels to stay up-to-date on legal and regulatory changes, thereby minimising risk and fostering a culture of ethical behaviour.

In addition, a financial investigation can uncover significant amounts of cash flow and assets that may have been hidden by fraudulent activity. Other issues revealed could include discrepancies between actual activities and reported figures/transactions, unreported gifts or purchases, and even sham transactions set up to hide the source of funds or launder money. Such investigations can also provide evidence against someone accused of financial crimes and help bring perpetrators to justice.

Each type of criminal activity costs organisations major losses in revenue every year; which could be prevented if appropriate actions were taken prior to entering into any sort of business agreement or transaction with an individual or company.

Red flags of financial crime

When it comes to financial crime, the best way to protect yourself is by being aware of the common warning signs. Financial criminals often leave a trail of red flags that can alert you to their activity before any serious damage is done. Knowing what these red flags are and how to identify them is key in preventing financial fraud. Here are some of the most common red flags that should be taken seriously:

Suspicious or sudden changes in bank accounts – Unexplained deposits or withdrawals, multiple transfers between accounts, large amounts sent overseas without explanation, or sudden spikes in spending could all be indicative of criminal activity. If an individual’s expense account balance appears abnormally high compared to previous statements then this could also indicate potential fraudulent behaviour.

Shifting responsibilities – When the same person is responsible for multiple roles that would normally require oversight from different departments (e.g., accounting and IT) this could indicate an attempt to conceal unethical behaviour. Even though that is not always the case, businesses should be proactive and ensure that more than one person approves decisions.

Unusual transactions – If there are suspiciously frequent payments made from one company/individual’s account to another with no apparent connection between them then this could be a sign of money laundering taking place. It may also be worth checking for unexplained wire transfers as well as any other unusual transactions which do not seem connected with legitimate business operations. For example, transactions that lack supporting documentation or are inconsistent with a customer’s normal activity should be flagged for further investigation.

A lack of internal controls – Companies without proper internal financial controls are more vulnerable to financial fraud. Internal policies and procedures along with alert systems are crucial for dealing and detecting financial crime. A weak internal control structure makes the business vulnerable to threats and it is a sign that illegal activities could be undertaken without being found.

Multiple sources of income – If an individual has multiple sources of income but cannot explain how they are legally obtained then this could be a sign of fraud. Employees should be able to explain how revenue is coming into the businesses and provide evidence for growth and expansion.

Structuring – This involves deliberately breaking up large transactions into smaller ones in order to avoid triggering suspicious activity reports (SARs). Structuring is typically done by depositing amounts just below a reporting threshold or using multiple accounts to make payments.

Measures against financial crime

Financial investigations can reveal the need for stronger measures against financial crime. One measure that businesses can take against financial crime is to conduct background checks and screenings on employees, suppliers and other partners. This includes verifying their identity, checking credit reports and criminal records, as well as reviewing their education and employment history. Companies should also ensure that appropriate policies are in place regarding financial transactions and the handling of customer funds.

Another important measure is to implement internal controls such as requiring dual signatures for certain transactions or setting up an internal audit system. Companies should also have procedures in place to monitor customer accounts for unusual or suspicious activities, especially those involving large sums of money or high-risk countries or individuals. Businesses should be aware of the latest trends in financial crime and stay up-to-date on applicable regulations so they can identify any potential risks quickly.

Organisations can also protect themselves from financial crimes by training staff members in basic fraud prevention techniques such as recognising warning signs like the red flags mentioned earlier. They could also be trained in understanding how to identify fraudulent documents and learning about measures to take when faced with a suspicious transaction. Companies may consider using software tools such as transaction monitoring systems which can detect suspicious activity more easily than human eyes alone.

Choosing the right investigator

When choosing the right financial investigator, it is important to consider their expertise and experience in the field. It is essential to choose someone who has an in-depth understanding of the complexities of financial investigations and how they can be conducted effectively. An experienced investigator should have the necessary knowledge and resources to uncover any irregularities or potential fraudulent activity. They should also know all relevant laws and regulations that apply to financial investigations so as to ensure compliance. They should possess strong problem-solving skills in order to successfully identify patterns and possible solutions when dealing with cases.

Finding a qualified financial investigator can be difficult given the specialised nature of the profession. However, there are many ways for businesses to locate a credible and reliable professional. Seeking referrals from trusted sources such as accountants or existing business contacts may lead to positive results. It is also wise for companies to carefully research different investigators before making a final decision; looking into credentials, background checks and reviews from previous clients could help inform an informed choice. Additionally, there are organisations such as the Association of Certified Fraud Examiners (ACFE) which on top of offering training courses for investigators, also provide access to a network of certified professionals who adhere to standards set by the ACFE.

Keep in mind

Taking no action against financial crimes allows fraudulent activities to take place that could have been prevented with proper investigation procedures. Businesses will face many threats over the years and the best way to deal with them is to take action and choose reliable professionals to handle them. Are you looking for a system to help you?

Polonious offers workload management and a growing list of integrations that are easy to use. We can provide one-click graphical reports, PDF output, and flexible CSV format reporting. As we are ISO 9001 and ISO 27001 certified, our customers get to experience a high-quality service with high security and confidentiality. Do you want to easily access your documents from anywhere you are? Get in touch and we will give you a demo!

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Cybercrimes: How to Secure Your Workplace

by Muznah Naeem | Mar 16, 2023 | Articles

Research predicts that by the end of 2025, cybercrimes are predicted to come at a cost of $10.5 trillion US dollars annually – that means that in every hour alone, cybercrimes will result in a $685 million dollar loss to the economy.

As businesses continue to store more of their data online, they become increasingly vulnerable to cybercrime and employers must take all relevant steps to ensure that their workplace’s cybersecurity is not compromised. Failing to do so can result in far-reaching consequences including loss of intellectual property, theft of important data, fraud and embezzlement and significant disruption to the business and its operations.

cybercrime poses a threat to the integrity of data

Additionally, if your business handles the personal data or financial information of clients, customers or employees, you are responsible for ensuring that your company meets all legislative data-protection requirements. Falling prey to cybercrimes and risking such information can also result in major legal repercussions and long-term damage to your company’s image.

Whilst there is no single method that can protect your business from all cybercrime, the following offers a guide through various strategies that will help you develop the approach most ideal for your workplace.

How to protect your business against cybercrime

1. Have your data backed up at all times

Having data backups is essential for business and not only in the context of cybercrime – data can be damaged or misplaced by unforeseen circumstances such as software corruption, computer viruses and human error. If data is lost or damaged as a result of a cyber-attack, having the ability to recover important information is necessary in ensuring that the company is able to recover and get back on track as soon as possible.

Ensuring that your data is backed up securely is not typically a costly or difficult endeavour for organisations to ensure and there are many options available.

Key features of a secure backup system to look out for include:

- - Using multiple methods of backup instead of relying on one (i.e. local/portable device, cloud storage etc.)
  - Daily, weekly, quarterly and yearly backups
  - Access to systems is encrypted and secure for authorised personnel
  - Sacable software that has the capacity to store larger amounts of data

2. Securing your devices and network system

What you incorporate in your security processes will differ according to your organisational needs. However, there are a few simple methods that all employers can use to ensure their devices and networks are adequately secured. For example, making sure that all software is updated regularly and spam filters are turned on are both simple security measures that offer protection in all workplaces.

Installing targeted security software on the equipment is another great option as it helps prevent software hacks and infections and can also be tailored or adjusted to your requirements (i.e. anti-virus, anti-spyware etc). For businesses that have large amounts of data or complex systems, firewalls are also a useful tool to consider as they filter out unnecessary traffic that can sometimes have malicious intent.

3. Encryption

Encryption essentially works by taking data and “translating” it into a form that turns it unreadable until the system is provided with the right password/code. By encrypting data before sending it over the internet, employers can limit the risk of malicious tampering or theft. Encryption also increases the amount of trust customers have, protects confidential information and improves data integrity whilst remaining an affordable option for most employers.

4. Multi-factor authentication (MFA)

Like encryption, multi-factor authentication (MFA) is a tool that helps make sure only authorised people gain access to sensitive data and company networks. It’s an easy-to-implement technique whereby security processes require individuals to provide more than one piece of evidence to help identify them – this makes it more difficult for people to gain access to your company’s network or devices. MFA is a great way to supplement password protection, especially if done so with biometrics as it creates a security level difficult to breach even if the password/code itself is compromised.

5. Requiring employees to use ‘passphrases’

Passphrases operate exactly like passwords in terms of limiting access to devices and content with confidential information, however, they are considered stronger and more secure as their format is more secure. Passphrases are a combination of different words that are not only long but also complex, unpredictable and unique. Having passphrases with requirements around their length, complexity and uniqueness pushes employees to be more conscious about the combinations they choose, contributing to greater overall password strength and effectiveness.

An alternative to passphrases is implementing password managers which automatically form long complicated passwords and store them on your behalf and this may be an option for employees who don’t want to bother with having to create new passphrases every few months.

6. Monitor equipment usage

Tracking equipment and software usage helps the organisation make sure it is not only able to trace potential threats but also track security breaches to their origin. This is essential for understanding how to prevent future cybercrime from occurring in a similar manner. Without knowing the amount or type of devices you’ve got circulating amongst employees as well as who they’re assigned to, following up on any data threats can become an unnecessarily long and/or complicated process. Making sure that employees are careful about wifi systems they use (i.e. avoiding insecure public networks), who they let use their devices and plugging in USBs/portable devices.

cybcercrimes can cause long-lasting damage to organisations

7. Training employees

Many employers assume that employees understand what the best practices are for preventing cybercrime and whilst this may be true for some workers, it is a misguided generalisation to make. Even for employees who have an idea of how to protect data, your organisation may have some specific requirements that are unique to you that they haven’t encountered before. Employees who are not aware of how to mitigate cyber threats pose a major risk to the security of data which is why making sure you train and educate them is absolutely important right from the onboarding process.

Some key aspects to improve their knowledge on are:

- - How to choose and maintain strong, secure passwords
  - Picking up on suspicious signs that suggest malicious activity
  - Best practices for using any company-specific software
  - First steps to take when encountering a cyber threat
  - How to report any cybercrimes and threats

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To conclude, the growing exposure to cyber threats poses a significant threat to the overall security of companies. Understanding what you can do as an employer to ensure that your digital systems, data and intellectual property are secured is essential towards preventing and mitigating potential cybercrime in the workplace.

Why you should de-escalate workplace conflict early

by Eleftheria Papadopoulou | Mar 13, 2023 | Articles

De-escalating a conflict means taking steps to reduce tension, hostility and disagreement between two or more parties. It is an important skill for managers to possess, as it can help smooth out workplace disputes before they escalate into more serious issues. De-escalating a conflict requires understanding the root cause of the problem, listening to both sides and remaining neutral, identifying areas where each side can compromise, encouraging open communication between all involved parties and providing resources if needed. By following these steps, businesses can effectively de-escalate conflicts in their workplace and prevent them from becoming larger issues down the line.

Why you should act quickly

De-escalating conflicts early on is essential for keeping a healthy, productive workplace. When left unchecked, conflict can escalate quickly and create an environment of tension and mistrust between employees. This can lead to decreased productivity, poor morale, and even legal issues if the situation is not handled properly. By de-escalating conflicts as soon as they arise, managers can nip these issues in the bud before they impact the workplace culture. Taking proactive steps to address disagreements between colleagues will help ensure that everyone remains focused on their job tasks without feeling threatened or intimidated by each other’s presence. De-escalation also encourages open communication among employees which helps foster collaboration and understanding in the workplace.

How to de-escalate conflict

It can be hard to determine where to start when dealing with different issues of various severity. By having a clear outline of what solutions can be there, managers can feel more at ease and more comfortable with making decisions.

-Understand the root cause of the conflict

-Listen to both sides and remain neutral

-Identify areas where each side can compromise

-Set clear boundaries and expectations for future interactions between employees

-Change communication delivery

Understand the root cause of the conflict

When it comes to de-escalating workplace conflict, one of the most important steps is understanding the root cause of the problem. This can be difficult as oftentimes underlying issues are not readily apparent and may require some digging to uncover. It is important for managers to take a step back and look at the situation objectively in order to determine what is really going on beneath the surface. By doing this, they can then address any deeper issues that might be causing conflict between employees or preventing them from working together effectively.

It helps if managers speak with both parties involved in order to get an accurate picture of what happened leading up to the conflict. They should ask questions such as “What do you think caused this disagreement?” or “How could things have been handled differently?” Doing so will help them gain insight into why the problem arose in the first place and how best they can intervene before it gets out of hand. In addition, having each party explain their perspective gives everyone involved a chance to vent their feelings without fear of judgement or retribution while also providing valuable information that can be used when coming up with solutions later on down the line.

Listen to both sides and remain neutral

Another essential action employers need to take when it comes to de-escalating conflicts is being willing to really listen to both sides without passing judgement or taking sides. Taking proactive steps to address disagreements between colleagues quickly requires active listening and engagement from the employer. It is essential that both parties remain open-minded and unbiased so they can view all aspects of the situation objectively without forming any preconceived notions or opinions beforehand. By encouraging open dialogue between both parties, managers can help foster a more collaborative atmosphere in the workplace which is essential for resolving disputes and improving overall morale.

It is also crucial for managers to be aware of their own biases when it comes to de-escalating workplace conflict. Unconscious bias is an issue many workplaces deal with that can take time to be resolved. It is easy to want to side with someone you are familiar with or agree with when it comes to disagreements, but this is not always in the best interest of those involved. Managers should remain impartial throughout the process and strive to identify areas where compromise can be reached. Doing so will help ensure that everyone continues working together harmoniously without any lingering animosity or mistrust between employees.

Identify areas where each side can compromise

Conflict in the workplace can be incredibly damaging to morale and productivity, so managers need to take steps to de-escalate any disputes that arise as efficiently and effectively as possible. Doing this correctly requires more than just mediating a conversation between two parties – it also involves identifying areas where each side can compromise to come up with a mutually beneficial solution. This process is not always straightforward. Managers must be willing to follow the other steps of actively listening to both sides of the argument, remaining impartial and neutral throughout and then deciding where compromise can be reached to ensure that everyone works together harmoniously. Doing so will help maintain a positive workplace atmosphere and foster collaboration between colleagues.

By following these steps, managers can play a key role in helping improve workplace dynamics by calming tensions when needed and ultimately creating a more productive work environment for all involved. When done correctly, de-escalating conflicts can lead to better communication among employees as well. Try not to directly blame one individual, except if the case is extreme. Rather, try to come to a conclusion and make them see how their actions could have impacted someone on their own if possible. This will allow the employee to take accountability and understand where the other individual is coming from.

Set clear boundaries and expectations for future interactions between employees

Employers need to set clear boundaries and expectations for future interactions between employees, so that any disagreements that arise in the future are addressed in a certain manner. Doing so will help ensure that everyone is aware of what is expected of them and will lead to better communication between colleagues. This can be done through providing employees with written policies regarding workplace behaviour as well as verbal reminders during team meetings or one-on-one conversations.

Managers should also ensure that all parties involved are treated fairly and equally to maintain a level of trust and respect among colleagues. Additionally, they should provide specific guidelines on how conflicts should be handled in the future, such as what steps need to be taken if issues escalate or when it is appropriate to escalate the situation to higher levels of management.

On top of setting boundaries and expectations for interactions between employees, managers should also work on cultivating an environment where employees feel comfortable discussing their disagreements in a respectful manner. This means creating an atmosphere where all parties involved feel safe to express their perspectives without feeling like their voice is not being heard or taken into consideration. Managers can do this by actively engaging in conversations with both parties and encouraging them to share their own ideas on what they expect to happen and why.

Employees come from diverse backgrounds and understanding what is acceptable and inappropriate can take time which is why there needs to be a standard when employees interact. If necessary, employers should also offer resources such as counselling services or mediation sessions so that employees have access to additional support if needed. EAP has become very popular in Australia, with many employers using it to protect the mental health of their staff.

There is another advantage of fostering an environment where collaboration is valued and colleagues handle disputes respectfully. Everyone involved in a disagreement will be able to express their side and perspective while still maintaining a sense of professionalism among team members which ultimately helps create a stronger bond among them going forward. That is why when setting expectations for future interactions between employees it is essential for companies to take into account the needs of each party while striving toward agreement rather than contention – this way everyone remains productive while working together towards common goals.

Change communication delivery

A manager should have the ability to adapt their communication skills in order to effectively de-escalate conflicts that arise within the workplace. Differing personalities and perspectives can lead to disagreements between colleagues, but adapting your communication style according to the specific conflict at hand can be very helpful. Employees will not feel attacked or singled out and they will be more open with talking and sharing their worries and problems.

This will ultimately lead to better collaboration and understanding between employees and a faster resolution. Training on how to improve communication is an excellent strategy that can be used for all employees within an organisation. It will assist employees with not coming off as rude or offensive and teach them how to solve problems on their own in a calm manner.

A few things to remember

Being able to effectively de-escalate conflicts is a useful and much-needed skill for any manager looking to create an effective work environment free from retaliation and hostility. Employees should be informed on what steps they have to take to handle a conflict correctly without letting it impact business operations or the workplace. Sometimes conflict may be so extreme that an investigation is needed to understand the root cause of the problem and what exactly went wrong.

This is where Polonious steps in. We help companies handle conflict complaints and investigations to improve their workplace culture and productivity. Our goal is to manage the complaint process to ensure procedural fairness and that employees feel fairly treated, heard and valued. We streamline most of the tasks so business disruptions are prevented and costs are minimised. We make it easy for companies to investigate complaints and handle issues by allowing them to store all information in one place that can be accessed from anywhere, anytime. Do you want to know more? Request a demo!

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Risk profile: How to develop an effective one

by Eleftheria Papadopoulou | Mar 10, 2023 | Articles

Risk management is an essential part of any business and risk profiles are one of the most important tools used in risk management. A risk profile is a description of all the potential risks associated with a particular business and outlines strategies to mitigate those risks. Risk profiles help businesses identify areas where risk exists, assess the probability of risk occurring and its impact on operations, develop strategies to reduce risk, set up processes for monitoring risk levels, evaluate their effectiveness regularly and document these actions for future reference. By having this information readily available in one place, businesses can be better prepared to anticipate and respond quickly should any unforeseen events occur.

What is a risk profile?

A risk profile is an analysis of a company’s particular financial and operational risk exposure s, which is used to develop a comprehensive strategy for managing these risks. It typically includes a review of the company’s internal processes, policies and procedures, as well as its external environment. The risk profile can be used to identify potential areas of weakness, threats, and opportunities. Companies use risk profiles to determine what risks they face and how best to manage them.

Risk profiles are essential for helping companies make informed decisions about their operations and budgeting. They allow companies to evaluate the potential risks associated with their investments or projects before making major commitments. By considering the potential risks in advance, companies can avoid costly mistakes or unforeseen issues that might result poor decision-making. Risk profiles also provide insight into the factors that could lead to long-term success or failure in certain areas of business operations.

For example, an accurate risk profile will help a company assess the legitimacy of suppliers or partners before entering into agreements with them. Risk profiles are also commonly employed when determining whether an organisation should diversify its investments or embark on a new venture entirely. This tool allows businesses to plan ahead so they can reduce uncertainty and increase their chances for success over the long run.

How do you develop a risk profile?

To develop a risk profile, a business needs to determine its risk appetite and risk tolerance. How is that done? By:

-Identifying risk areas

-Assessing risk

-Ranking risk

-Developing risk management strategies

Identifying risk areas

Identifying risk areas in your business is the first step in establishing a risk profile. Risk profiles provide a comprehensive overview of all the potential risks associated with a particular business, allowing organisations to assess the probability and impact of a risk materialising. By having this information readily available in one place, businesses can be better prepared to anticipate and respond quickly should any unforeseen events occur.

Identifying risk areas starts by understanding how different parts of the organisation operate. This includes evaluating operational processes such as production lines or customer service protocols, financial decisions such as investments or contracts; legal considerations such as compliance with laws and regulations and technological factors like data security or software updates. Once these areas have been identified, it is crucial to understand each risk, its chances of happening and its potential influence on operations if it does take place. This helps determine which risks are more likely to occur so that appropriate mitigation measures can be put into place.

Assessing risk

Assessing risk is the next step, as it helps organisations detect where risk exists and what its risk rating is.

When assessing risk, organisations should consider both internal and external factors that could affect their operations. Internally, organisations should analyse their financial position and resources, their current technology and systems infrastructure, their personnel policies, and data security protocols. Additionally, organisations should also consider external factors like industry trends, economic conditions, customer demands, competitive pressures, political considerations and legal regulations.

Organisations should use quantitative risk analysis methods when assessing risk to create a comprehensive risk profile. This type of analysis requires organisations to develop tools for identifying risks based on data collected about the particular situation. Organisations should also use qualitative methods when assessing risks, such as interviews with stakeholders or subject matter experts who can provide insights into potential risks or areas of vulnerability that may not be easily quantified but still need to be considered in the overall assessment process.

Ranking risk

Companies can rank risk to create a risk profile by thoroughly assessing the probability and impact of a potential hazard on their organisation. Firstly, companies should identify the assets of value within their business that are vulnerable to risk. This includes tangible assets such as physical property and intangible assets such as intellectual property and reputational damage. Once these risks have been identified, companies must then estimate the likelihood and severity of the threats to those assets occurring in order to create a risk profile. Polonious assists its clients with ranking risk by providing them with an integrated risk matrix that colour codes severity and likelihood. This makes it easier to determine which threats businesses need to focus on.

Businesses should also consider how significant any potential losses might be if an incident were to happen, what controls are currently in place, and how quickly they could be implemented in case of emergency. Risk management teams should keep detailed records of every assessment they make and review them on a regular basis to ensure accuracy. By taking all these different elements into consideration when evaluating risk, companies can create detailed risk profiles which will help them understand their exposure better and know what steps need to be taken in order to mitigate any potential losses or disruptions.

Developing risk management strategies

The first step in this process is to conduct a risk assessment of the current risk environment. Companies should evaluate their assets, identify potential risks, and develop mitigation strategies. For example, companies should consider the physical security of their assets, such as computers and networks, to reduce the risk of theft or damage. Additionally, they should assess areas such as employee health and safety regulations to protect against injury or illness.

Companies should also review their contracts with customers and vendors to ensure compliance with any applicable laws. Having meetings with staff and asking them for their own opinions and solutions can be an effective way to develop these strategies. This is because the staff experience first-hand certain processes in the organisation and can come up with solutions to solve certain issues they have faced or are facing.

Once the assessment of the current risk environment has been completed, companies can then develop a comprehensive risk profile that outlines what could happen if certain risks were realised. This profile should include an overview of how each type of risk could affect the company’s operations and profitability. It should also detail strategies for monitoring and managing each type of risk.

Companies should also consider steps they can take to prevent certain risks from occurring in the first place such as requiring background checks for new employees or instituting data security systems and procedures to protect customer information. Businesses can create contingency plans so that they are prepared when disaster strikes. Businesses must also establish regular reviews of their risk management strategies in order to ensure they are effective over time and adjust them accordingly.

Keep in mind

It is a known fact that risk management is an ongoing effort that needs a lot of engagement by both the management and other staff members. Risk management and the creation of risk profiles heavily rely on expertise and teamwork for better results.

Polonious assists its clients with productivity during their risk management process so they can focus on their key operations activities and stay efficient. Our system allows everyone who is involved in risk management to access relevant documents and create a single hierarchy of risks and treatments that are cross referenced with assets. Registers and reports can be exported easily while assessments can be filled out online through Polonious. If you want to learn more about how we support our customers, reach out, and we will give you a demo.

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