Fraud

Internal employee fraud and external fraud are both on the rise and they are becoming increasingly significant issues facing organizations today. Our fraud risk review services involve an analysis of your organization’s risk profile and recommendations to reduce risk exposure through fraud prevention. Anti-fraud programs include training staff, fraud awareness techniques, teaching management monitoring procedures to minimize fraud and implementing whistle-blower policies to encourage fraud reporting. Our solutions are tailored to your organization’s needs.

If you own a small business, you are more vulnerable to fraud than owners of large businesses. According to the Association of Certified Fraud Examiners,* the average fraud scheme costs a small business $127,500 – 24% more than those perpetrated on large businesses. The reason? Small businesses typically have a high level of trust among co-workers – and a tendency not to segregate duties.

* Report to the Nation on Occupational Fraud and Abuse, Association of Certified Fraud Examiners

What types of fraud usually occurs?

• Asset misappropriations – by far the most common, this usually involves the theft or misuse of an organization's assets including the theft of cash or other assets from the company or concealing a theft by not recording sales or falsifying expense reports.
• Corruption - common examples include kickbacks where an employee underbills a customer or overbills a supplier and pockets the proceeds.
• Fraudulent statements - these schemes generally involve the falsification of an organization’s financial statements possibly by manipulating accounts receivable (i.e. keeping an amount that has been paid by a customer in accounts receivable and then writing off that receivable as a bad debt) or inflating company income in order to receive a larger salary or bonus (possibly recording fictitious sales or failing to record expenses).

How can you protect your business from becoming a fraud statistic? Removing opportunity is key to minimizing or preventing losses from fraud:

• internal controls and segregation of duties
• following up on unusual comments or complaints from customers or employees
• background checks on new employees
• ethics training for employees
• establishing fraud policies
• safeguarding assets by restricting access by, for example, locking doors/storage areas, etc.
• workplace surveillance
• willingness of the company to prosecute
• WWW.ACFE.COM