Importance of internal controlling in fraud detection in Czech entities

Abstract

The aim of the paper is to present answers on questions of means used to prevent fraud commitment and early detection in organizations by using internal controlling department. Fraud is a serious problem everywhere in the world, which means huge financial losses not only for the company itself. Entities usually consider the risk of fraud inside as insignificant and therefore they do not take any preventive measures to minimize the possibility of its commitment. Companies lack the tools for quick detection of frauds and offenders. Here is the field of controlling, which deals with the basic issues related to the frauds in enterprises, their detection and prevention. Author performed research in 2018, when 51 employees of the controlling departments of companies operating in the Czech Republic participated in the questionnaire survey. Data were statistically evaluated using proportional and independence tests. For the purposes of the analysis, we have set the following research question: "How much is the function of the internal controlling officer in detecting fraud important in Czech companies?" We examined this research question from different perspectives and results showed that controlling staff plays important role within organizations for better fraud and mistake detection caused by accounting staff. Based on results some of fraud or mistakes detected had significant influence on company's profit performance.