What is a typical corrective action following the discovery of fraud?

Implementing stricter protocols to prevent recurrence is a standard and effective approach after discovering fraud. This action reflects a commitment to addressing the root causes of the issues and enhances the integrity of the organization. By introducing more stringent procedures, such as improved checks and balances, enhanced employee training, or more robust oversight mechanisms, the organization seeks to create a disciplined environment that minimizes the risk of future fraudulent activities. This corrective action not only helps to restore trust among clients and stakeholders but also demonstrates a proactive stance toward ethical practices and compliance.

Restructuring the pricing model or offering refunds without communication could potentially exacerbate the situation by failing to address the underlying problem or by not being transparent with clients. Increased advertising may simply act as a superficial fix rather than tackling the core issues of fraud, so these approaches do not provide a sustainable solution. The focus on implementing stricter protocols is essential for long-term prevention and organizational health.