Employee fraud is a problem that many organizations face today. It can affect companies of any size, in any location and within any industry. Despite the fact that business owners may trust their employees, there are various reasons why an employee may commit fraud. Triebsch & Frampton, APC firm can assist you with implementing a strategy that is best suitable for your business.
A certified fraud examiner can recommend internal controls to prevent fraud. Keep in mind that its easier to prevent fraud than it is to recover your losses.
The Three Categories of Fraud
Fraud can be dissected into three categories: financial statement fraud, asset misappropriation and corruption. The least costly of the three is asset misappropriation.
Financial statement fraud makes up less then five percent of reported fraud cases, yet it causes the most median lost. This consists of schemes where employees purposely omit or misstate information in an organization’s financial reports. Examples include hiding liabilities, inflating assets or creating fictitious revenues.
Preventing Employee Fraud
There are steps you can take today to prevent this from happening to your organization:
Get Acquainted with Your Employees: It’s common for fraudsters to portray behavioral traits before committing fraud. Being observant and listening to what’s going on in the workplace can help you to identify potential fraud. Changes in attitude can sometimes signify risk. Knowing your employees will enable you to take notice of characteristic changes early on. Conversations that occur in the workplace can also give hints.
Set Up a Reporting System: It’s important to raise fraud awareness in the workplace. Educate employees about fraud risks, types of fraud and consequences of committing fraud. Make sure to set up a reporting system that will enable workers to report their suspicions anonymously.
Implement Internal Controls: Certified fraud examiners can assist you with implementing internal controls. Doing so will safeguard your company’s assets, accounting records and deter and detect potential theft and fraud.
Monitor Vacation Balances: A perfect attendance sounds like a dedicated employee. However, it could point to something more sinister. Employees who opt out of vacation time could be hiding somethingIt’s a good idea to rotate employees to various jobs. This will allow the activities of each employee to be reviewed by a second pair of eyes and potentially reveal fraud.
Have your company assessed by Triebsch & Frampton, APC, who are highly qualified and certified fraud lawyers in Central Valley.