Final answer:
Fraud prevention is the most important and cost-effective way to reduce losses from fraud. Early fraud detection is also crucial in minimizing losses.
Step-by-step explanation:
Fraud prevention is the most important and cost-effective way to reduce losses from fraud. By implementing effective measures to prevent fraud from occurring in the first place, organizations can avoid the financial, legal, and reputational damages associated with fraud.
For example, implementing internal controls, such as segregation of duties and regular audits, can help detect and deter fraudulent activities. Training employees on fraud awareness and providing a reporting mechanism also contribute to fraud prevention.
Early fraud detection is also crucial in minimizing losses. By implementing systems and processes that monitor and analyze transactional data, organizations can identify anomalies and suspicious patterns that may indicate fraudulent activities.