According to the ACFE’s 2020 Report to the Nations, businesses lose about five percent of revenue to fraud annually. The leading types of occupational fraud include forging financial documents, insider trading and embezzlement. There are some telltale signs of occupational fraud all business owners should be aware of.
Identifying fraud within your organization can be challenging. The ACFE estimates that a typical fraud case can remain undetected for 14 months. Therefore, businesses must employ smart fraud prevention and detection mechanisms. You should always look out for the following signs:
If you notice any of the above signs, you could be losing revenue to occupational fraud. Consider launching an investigation.
Even if you haven’t noticed lost items or suspicious behavior amongst your employees, someone could be stealing behind the scenes. Here are some ways you can prevent and monitor fraudulent activity:
One way to protect your sensitive data and valuable resources is by restricting access to authorized employees. Should a breach or loss occur, you can easily target individuals with access rights. Install keycard locks on doors and give authorized personnel access cards to prevent intruders from entering protected zones.
Background Screening Before Hiring
A resume alone cannot reveal a comprehensive history of a potential employee. Enlist the services of a professional screening agency to perform background checks on recruitment candidates.
Weak internal controls are the primary cause of occupational fraud. Work with a CPA to establish and maintain robust internal financial controls to seal any loopholes and ensure you aren’t losing revenue. Critical anti-fraud controls include:
According to the ACFE, employees are the whistleblowers of more than 50 percent of corruption cases in organizations. Empower your workers with an anti-fraud program. It should explain how internal controls work and how to detect and report fraud. It is a good idea to establish an anonymous tip line for fraud reporting.
Cultivate an Ethical Culture
As a business owner or manager, you should lead by example. By conducting business ethically and observing the values of the organization, most employees will follow suit. For the characters who may want to steal, follow the anti-fraud prevention measures discussed above.
Outsource Important Tasks
By outsourcing tasks such as bookkeeping and accounting, you’re delegating the handling of your business finances to a separate team that is solely in charge of financial-related tasks for your business. This allows you to keep close track of your funds and transactions without worrying about unauthorized access. To learn more about outsourced services in Las Vegas, contact TheOfficeSquad at 702-649-3495 today.
We know what it’s like to build a business from the ground up, and we understand the importance of a good support system.
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