IDENTIFICATION AND MINIMIZATION OF FINANCIAL FRAUD RISKS IN MAKING ADMINISTRATIVE DECISIONS

Abstract

The globalization of the world economy, the functioning of a large number of financial institutions, the growth of the volume of banking, financial and credit services have caused an increase in the role of financial relations in modern life and have become the basis for the growth of various types of fraud in the financial industry. The purpose of the paper is to determine methods and tools for identifying and minimizing the risks of financial fraud while making management decisions. Financial fraud unbalances fundamental economic relations – relationns with the formation, distribution, and use of monetary resources, causes enormous losses to the national economy, threatens the development of investment and entrepreneurial activity, affects the incomes and well-being of citizens. Natural persons, legal entities, and the state, during their activities, deal with a number of risks that directly or indirectly affect the achievement of financial results. Considering this, there is a need to identify and minimize potential risks. Types of financial fraud against individuals, legal entities, and the state are distinguished. The main signs of financial fraud have been established. Measures and ways of identifying and minimizing the risks of financial fraud should include recognizing the problem and its threat; studying the essence of modern fraudulent schemes and their orientation; identificating "bottlenecks" in financial resources management, which are most threatened by potential fraudulent actions; analyzing the adequate situations of financial fraud risk management methods; permanent increase in the level of financial literacy of individuals; adaptability and improvement of the financial control system both at the level of a specific person and the economic entity or the state; promoting maximum openness, transparency, and sharing of information with unrestricted access; deepening cooperation with professionals both in the field of finance and law enforcement systems, data security or education.