By the time you finish reading this, you will be in a position to minimize frauds that occur a result of poor internal controls. But you will not be able to make these controls fool proof. Why? Simply because internal controls prevent or detect errors, frauds, failures etc, but are very much people dependent and so, although you might be able to design a strong internal control framework, there is no guarantee that these controls will be executed as originally designed. Taking an example; if a maker checker control verifies that all payments are as per the invoice amount, the control is that supervisors will authorize only those payments that match invoice amount. But if the supervisor himself wants to fraudulently approve the payment, then not much can be done to prevent the fraud. So, how to fraud proof the internal control framework. To answer this question, the following points need to be implemented so as to enhance the internal controls and make it ever more difficult to commit frauds. It is not possible to fully eliminate frauds; rather, these can be minimized. 1. Strengthen the internal audit function and provide more independent empowerment. Clearly, the department that detects most of the process failures is the internal audit or internal control department. Strengthening this dept or enhancing the scope of this department means that there is a greater probability that internal control failures will be detected. Once these are detected, remedial actions are taken to amend the process to avoid future instances, or to minimize the impact of such failures. 2. Rely more on preventive and automated controls rather than detective and manual controls. Frauds occur wherever there is manual intervention. Hence, on a regular basis, ideally monthly, process reviews should take place to try and replace manual controls by automated controls. This helps to plug gaps wherever human intervention is possible. 3. Consider all internal control lapses as serious. Never underestimate the potential failure of a control. Some controls make seem trivial and failures may be ignored because they involve small amounts. But these controls can be important too. A control is the same whether the transaction is small or large. Just because majority of the transactions are small, it does not mean that this control will not help identify large frauds. 4. Use business process flowcharts to better depict the process flows. Process flows help to properly design the internal control framework. It eliminates duplicate controls as well identifies gaps whereby significant process occurs without adequate controls.