Preventing Fraud in your Workplace

Preventing Fraud in your

Workplace

Preventing fraud in your workplaceIntroduction

• Over the past couple of years, the public’s attention has been captured by cases of corporate fraud involving many companies.

• In fact, studies show that occupational fraud now results in the loss of five percent of an organization’s annual revenue.

Preventing fraud in your workplaceMain Examples

• Their are many kinds of fraud, such as:– Falsifying reports or procedures

to maximize results and performance.

– Misrepresentation of dates or description of services.

– Accepting bribes from suppliers and customers.

– Providing false employer group and/or group membership information.

– Stealing company’s products.

Embezzlement

Corruption

Fraudulent documents

Preventing fraud in your workplaceStrategy 01 – Set clear standards

• One of the best ways to help safeguard a business is to set clear standards for your company employees.

• An employee manual can be helpful in establishing the principles and values to guide your organization.

• The rules apply to everyone.

Preventing fraud in your workplaceStrategy 02 – Check employee references

• When hiring new employees, check references and perform background checks that include employment, credit, licensing and criminal history.

• The benefit is far outweighed by the cost.

Preventing fraud in your workplaceStrategy 03 – Secure your organization

• Some deterrents are simple to initiate, but often go ignored.

• It is important to closely guard and monitor financial procedures and the company warehouse / inventory.

Preventing fraud in your workplaceStrategy 04 – Control who reviews sensitive docs

• Companies should control who first receives the bank statements and other sensitive documents.

• This helps eliminate the possibility that someone intercepts the mail first for the purpose of stealing or covering up an earlier theft.

Preventing fraud in your workplaceStrategy 05 – Consider annual audits

• Even though it may not be required, obtaining an annual audit is a good idea.

• An audit will not discover all fraud within an organization, but it will give you an opportunity for someone removed from the daily operations to take a “bird’s eye view” of the business.

Preventing fraud in your workplaceStrategy 06 – Watch for red flags

• Some of the red flags of fraud include:– An employee who seems to be living

beyond his or her means.– A sudden change in attitude and/or

behavior.– Unexplained profits and losses in the

books.– Evidence of relationships between

employees and customers or suppliers.– An employee who never takes vacation.– An employee who works a lot of overtime.– Evidence of financial hardship.

Preventing fraud in your workplaceStrategy 07 – Zero-tolerance culture

• Develop a zero-tolerance culture for fraud and corruption.

• Ensure that all the company materials or documents send the same message with company symbols, trademarks and slogans that encourage ethical behavior.

• Appreciation for Editorial Assistance by William R.Z. Kush:– [email protected]

Preventing fraud in your workplaceOur References

• The following are referenced in this presentation:– http://www.businessweek.com/smallbiz/tips/

archives/2010/07/spot_workplace_fraud.html– http://www.accountingnet.ie/business_finance/

Fraud_in_the_Workplace_-_Understanding_the_pitfalls_and_improving_your_effectiveness.php

– http://www.boston.com/jobs/bighelp2008/fall/workplace_fraud/

– http://www.prevention-commerce.com/pcevf.asp

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