||Fraud Tips Every Business Leader Should Know
By Cindy Penchishen
Organizations around the world lose an estimated 5 percent of their annual revenues to fraud, according to the ACFEs 2014 Report to the Nations on Occupational Fraud and Abuse. A single instance of fraud can be devastating: the median loss per fraud case in the ACFE study was $145,000, and more than a fifth of the cases involved losses of at least $1 million.
The good news? There are some basic steps your organization can take immediately to lessen your vulnerability to fraud. Remember and share these five tips:
- Be Proactive. Evaluate your internal controls for effectiveness and identify areas of the business that are vulnerable to fraud. Know what and where your weaknesses are so you can reinforce them or mitigate the weakness. Ensure that your employees know what is expected of them and that they are trained properly.
- Establish Reconciliation Procedures. Make sure that key accounts are reconciled and reviewed on a regular basis. Suspense accounts should be monitored and cleared frequently. Segregate the daily duties and reconciliation duties as often as practical.
- Know The Red Flags To Look For. Do workers know the warning signs of fraud? Gambling, Addiction, Family Problems, Living beyond means, Financial Difficulties and Defensive Attitudes are all potential red flags.
- Follow up on tips. Tips and conversations with employees are how most fraud is uncovered. Know your employees and respect what they are saying to you.
- Know When To Call For Help. You should call for help as soon as you suspect something is not right. Make sure you know what not to do as well as what the first steps should be. Have a plan in place prior to needing it. And lastly, do not put you or your employees in danger.
Implementing these tips could help prevent your organization from becoming a statistic so take action today.
Published with permission of Cindy Penchishen.
Statistics sourced from 2014 Global Fraud Study.