Impact of Specialized Departments on Fraud Risk:While specialization improves operational efficiency, it can also create silos, reducing oversight and coordination. This fragmentation may increase the overall fraud risk.
Key Considerations:
Fraud often occurs in areas where controls and communication are weak. Specialized departments may inadvertently facilitate fraud by isolating information.
Cross-departmental collaboration and centralized controls are essential to mitigate these risks.
Conclusion:The existence of many specialized departments increases the risk of fraud if not properly managed.
[References:ACFE recommendations on risk management and departmental coordination., , , ]
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