Is Your Business at Risk from Fraud?

While fraud can take various forms, the most common is theft by employees with access to cash.

Generally three elements align for an employee to steal cash in the workplace.

The employee:

  1. Experiences a personal financial crisis that forces him or her to seek an extraordinary solution to the problem being faced.
  2. Justifies that there is little or no harm associated with his or her action.
  3. Sees an opportunity to appropriate cash with a relatively low risk of being detected in the near term.

Employees who steal commonly start with relatively small amounts of money.  Often they don’t even see it as stealing, rationalizing the theft as a loan they have every intention of repaying in the future.

While the initial amounts involved may be negligible, experience teaches us that the thefts can grow exponentially as the employee becomes more confident there is a low risk of being detected.

No matter how carefully you screen potential employees or how fairly you treat them once they become part of your organization, you cannot affect the circumstances of their personal lives that influence specific actions.

However, you can limit your employees’ opportunities to commit fraud by putting internal controls in place.

Internal controls are accounting procedures designed to safeguard your assets.  The same way that seeing a police car in your rear view mirror prevents you from speeding on your commute, internal controls make the employee think twice.

An internal control study can help you assess the appropriateness of the controls in place over your systems.  Such a study can be tailored to your businesses needs and budget.  We’ll work with you to identify the intricacies of your business.  During this process we assess the controls you already have in place and recommend additional cost effective controls that will help you achieve your goals.

Here are three questions to ask:

  1. Does my company have the right internal controls in place?
  2. Do these controls help me prevent my employees from stealing from me?
  3. If employees are stealing from me, will the systems in place detect that theft?

You can mitigate the risk of fraud. Contact us today to see how an internal control study can help you put in place cost effective internal controls.

Let us help you take control and prevent fraud.