{"id":15861,"date":"2005-11-15T06:00:19","date_gmt":"2005-11-15T12:00:19","guid":{"rendered":"http:\/\/www.sequenceinc.com\/fraudfiles\/?p=15861"},"modified":"2015-02-24T14:45:15","modified_gmt":"2015-02-24T20:45:15","slug":"saving-money-with-proactive-fraud-prevention","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/saving-money-with-proactive-fraud-prevention\/","title":{"rendered":"Saving Money With Proactive Fraud Prevention"},"content":{"rendered":"

Written by Tracy L. Coenen, CPA, CFF<\/em><\/p>\n

Family Ties – Newsletter of UW-Madison Family Business Center<\/strong><\/em><\/p>\n

Cost-saving measures are often attractive to businesses. If a company with annual revenue of $10 million could eliminate a $600,000 expense, would management be interested? It can be done, and internal fraud prevention is the key.<\/p>\n

Companies lose an estimated 6% of revenue each year to fraud committed by employees. With today’s amazing shrinking margins, 6% could be a company’s entire profit for the year. That loss figure doesn’t even include the costs of investigating and litigating the cases.<\/p>\n

Proactive fraud prevention techniques are the key to preventing internal fraud. Fraud prevention is not about putting out fires as they spring up. True prevention is about fire-proofing a company to eliminate the risk of fire.<\/p>\n

A full-blown fraud prevention program is the best way to protect the company’s assets, but a few basic procedures can start a company on the path toward preventing internal fraud.
\n
\nRecommended Steps<\/strong>
\nStep One: Companies must hire the right employees. This can be easily accomplished with background checks, reference checks, employment verification, and credential verification. It is surprising how often a reference check or employment verification yields valuable information that disqualifies a candidate.<\/p>\n

While some former employers are reluctant to provide information because of the fear of lawsuits, many will give direct or indirect information about a former employee. Some may say that they would not rehire the employee if given the chance. Others may be more direct and say that the employee was fired for theft.<\/p>\n

Step Two: Implement policies and procedures specifically designed to prevent fraud. This step is easily the most extensive part of preventing fraud, and the involvement of an anti-fraud professional is the key to effective implementation.<\/p>\n

Businesses often refer to these policies and procedures as “internal controls”, but the traditional internal controls implemented by auditors and accountants do not have enough anti-fraud muscle behind them. Additional procedures that prevent fraud should be implemented, and these would include new authorization levels, separation of critical duties, and oversight of vulnerable areas.<\/p>\n

Step 3: Educate employees. Studies have shown that employees can be a company’s best watchdogs, as internal frauds are very often discovered via tips from employees.<\/p>\n

I’ve never met a business owner who is happy to have profits walk out the door unchecked. Proactive fraud prevention is a cost-effective way of stopping internal thefts.<\/p>\n

\"\"<\/p>\n

Tracy L. Coenen CPA, MBA, CFE is the president of Sequence Inc, a forensic accounting firm with offices in Milwaukee and Chicago.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Written by Tracy L. Coenen, CPA, CFF Family Ties – Newsletter of UW-Madison Family Business Center Cost-saving measures are often attractive to businesses. If a company with annual revenue of $10 million could eliminate a $600,000 expense, would management be […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1659],"tags":[],"class_list":["post-15861","post","type-post","status-publish","format-standard","hentry","category-internal-investigations"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p6Z0e-47P","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/15861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/comments?post=15861"}],"version-history":[{"count":0,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/15861\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/media?parent=15861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/categories?post=15861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/tags?post=15861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}