I would like to think that most companies are committed to doing business honestly. They try to do the right thing, and when a problem is found, they try to correct it quickly.
Even when a scandal is looming, I hope most companies would want to find the truth as fast as possible and take appropriate action.
Even when a company is committed to fixing problems, however, management does not always do it the right way. This is particularly true when it comes to investigating suspicions of wrongdoing. There are many times when such an investigation must be done by an independent party in order for the company to be in the best possible position following the conclusion of the investigation. Continue reading
Written by Tracy L. Coenen, CPA, CFF
Wisconsin Law Journal
If a fraud is worth committing, it’s worth committing right. A little extra effort in the commission of a fraud can go a long way toward profiting from it as long as possible. Follow these recommended steps to increase your chances of successfully pulling off a fraud at work.
Don’t Act Suspicious
Don’t be a complainer. Don’t blatantly fight the rules. Appear to go along with policies and procedures, and don’t cause trouble for your co-workers or supervisors. You don’t want to appear to be disgruntled or seem like a problem employee. Those types of employees cause suspicion. Continue reading
Written by Tracy L. Coenen, CPA, CFF
Wisconsin Law Journal
For the employee who is receiving cash in lieu of a real paycheck or who is otherwise concealing wages and earnings, it can be very difficult to prove the case. Cash doesn’t leave much of a trail, and a company that is willingly participating in a fraud like this isn’t likely to offer up proof of the fraud either. Continue reading
Executives have the means to commit and cover up the largest frauds. They have access to the information and computer systems, they have power over all employees and they have access to the money. The finance function is riddled with fraud risks and the company’s executives are in the best position to take advantage of those risks.
Because of the risk of losing large sums of money to fraud by executives, companies must ensure owners and boards of directors are actively involved in creating and maintaining an environment that is not conducive to fraud. This involves active oversight of daily operations, continuous monitoring of potential red flags of fraud and swift action when fraud is discovered. Continue reading
If you haven’t heard by now, internal fraud is expensive, costing companies an average of 6 percent of revenues each year. Employees are in an excellent position to steal the company blind. Particularly for those in upper management, access to assets is easy to come by.
With an estimated $3.7 trillion stolen annually by employees around the globe, companies should be highly motivated to invest in fraud prevention. Creating and implementing effective policies and procedures is not cheap, but it is far less expensive than exposure to internal fraud.
Companies should develop a comprehensive fraud prevention program that impacts all areas of a company. Such a program has three critical parts: education, investigation and proactive prevention. Continue reading
The average business loses approximately 5% of revenues to employee fraud. The employees are running off with money, fixed assets, and business opportunities. They are taking kickbacks from suppliers who overcharge for their products and services, and pushing contracts toward friends and relatives. Executives are manipulating financial statements to increase stock prices and impress lending institutions.
These types of dishonest activities can be decreased, however, by companies that take action to prevent and discourage fraudulent behavior. An extensive fraud prevention program might be the most effective way to reduce fraud opportunities, but following a recent flurry of regulatory requirements, many companies aren’t willing to invest more in revamping policies and procedures.
Activities that were traditionally thought to deter and detect fraud, such as independent audits and internal examinations, have been found to be less effective than previously believed. Those types of procedures may still provide some valuable business benefits, but they should not be relied upon as a primary tool for detecting and preventing fraud. Continue reading
The dreaded expense reports. Employees hate preparing them. Companies hate reviewing them. They seem to be painful for everyone involved, yet companies can’t get away from them all together.
You’re asking yourself why this might be an important topic. Expense report losses are really a minor expense for most companies, aren’t they? Yes, they are.
However, the problem with them is what they stand for in other areas of the company.
Cheating on expense reports is one of the most common thefts perpetrated by employees. While the amounts lost to expense report abuse may be small, condoning this unethical behavior can lead to bigger problems. Continue reading
The last thing you want to discover is that one of your employees is stealing from your small business. Not only is it a total violation of your trust, but internal fraud also has the potential to put you out of business.
According to the Association of Certified Fraud Examiners, businesses lose an average of 5% of revenues each year to fraud. Could your company survive if an employee stole 5% of your revenues? Continue reading
People who steal from their employers often exhibit telltale characteristics that could tip off management that they’re likely to commit fraud. These characteristics include attitudes on the job, daily work habits, and personal lifestyle issues. A few of these traits alone do not indicate fraud, but the potential for fraud to occur rises with more of the characteristics in an employee.
Often when a victim of occupational fraud reflects on the work history and personal life of the perpetrator, a light bulb comes on. The perpetrator exhibited many of these characteristics, but those things were overlooked in the normal course of business. Awareness of these characteristics can help reduce internal fraud. Continue reading
Have you ever wondered how and when your employees are stealing from the company? Did you ever wish that you were a fly on the wall, hearing all of the conversations that led up to a group theft? Have you considered secret cameras throughout your workplace to catch employees in the act? Have you wondered what employees are discussing with one another via your internal messaging system? Are you curious about how often employees are surfing the Internet?
It’s no secret that employees routinely steal from their employers. Whether it’s the office supplies taken home for the kids, the extra break while still on the clock, or stealing customer payments, they all constitute theft. Possibly even worse may be the instances of employee disloyalty, such as badmouthing the boss or encouraging good employees to leave the company. Continue reading