Strategies for Reducing Fraud in Corporate Organizations

Financial statement fraud has been a persistent problem that poses risks to corporations globally. Business leaders are concerned about financial statement fraud due to its potential to weaken financial stability, erode stakeholder confidence, and create conditions that may lead to significant financial distress or organizational collapse. Grounded in the fraud triangle theory, the purpose of this qualitative pragmatic inquiry research was to explore internal control strategies corporate leaders use to reduce financial statement fraud risk. The participants were 11 financial leaders in North Carolina, the District of Columbia, and Virginia who practiced effective internal controls to minimize financial fraud. Data were collected from semistructured interviews and financial documents. Through thematic analysis, four themes were identified: (a) segregation of duties, (b) leadership and ethical culture, (c) communication and technology innovation, and (d) risk management and monitoring. A primary recommendation is for business leaders to maintain robust internal controls to identify inefficiencies in financial reporting. The implications for positive social change include potentially improving the financial stability of organizations and increasing employment opportunities within local communities.