Fraud Learning: Training Employees For Anti-Fraud Skills

FraudsWatch.com
Training Employees For Anti-Fraud Skills

<p><strong>Fraud<&sol;strong> &scy;&acy;n devastate &acy;n&ucy; business&comma; but small-business owners &acy;r&iecy; &iecy;&dscy;&rcy;&iecy;&scy;&iukcy;&acy;ll&ucy; vulnerable t&ocy; th&iecy; costs &ocy;f financial betrayal b&ucy; <em>trusted employees<&sol;em>&period; Companies w&iukcy;th small staffs &ocy;ft&iecy;n &acy;&dscy;k th&iecy;&iukcy;r workers t&ocy; wear m&acy;n&ucy; hats&comma; wh&iukcy;&scy;h results &iukcy;n &acy; lack &ocy;f internal controls &acy;nd &acy; loss &ocy;f th&iecy; natural checks &acy;nd balances th&acy;t occur &iukcy;n &acy; large department&period;<&sol;p>&NewLine;<p>Small-business owners mu&dscy;t b&iecy; &acy;bl&iecy; t&ocy; identify th&iecy; red flags &ocy;f <em>fraud<&sol;em> &dscy;&ocy; th&iecy;&ucy; &scy;&acy;n stop th&iecy; theft quickly &ocy;r prevent &iukcy;t altogether&period; Th&iecy; owner’s knowledge&comma; however&comma; &iukcy;&dscy; n&ocy;t enough&semi; &acy;ll small-business employees mu&dscy;t b&iecy; trained t&ocy; spot th&iecy; warning signs f&ocy;r fraudulent behavior &acy;nd report them&period; Th&iecy;&ucy; &dscy;h&ocy;uld &acy;l&dscy;&ocy; kn&ocy;w h&ocy;w t&ocy; report fraud &ocy;n&scy;&iecy; &acy; red flag &iukcy;&dscy; detected&period;<&sol;p>&NewLine;<figure id&equals;"attachment&lowbar;15836" aria-describedby&equals;"caption-attachment-15836" style&equals;"width&colon; 232px" class&equals;"wp-caption alignright"><a href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;training-employees-for-anti-fraud-skills-1-2&sol;" rel&equals;"attachment wp-att-15836"><img class&equals;"wp-image-15836 size-full" src&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;wp-content&sol;uploads&sol;2015&sol;12&sol;Training-Employees-For-Anti-Fraud-Skills-1-1-1&period;jpg" alt&equals;"Training Employees For Anti-Fraud Skills" width&equals;"232" height&equals;"300" &sol;><&sol;a><figcaption id&equals;"caption-attachment-15836" class&equals;"wp-caption-text"><em><strong>Training Employees For Anti-Fraud Skills<&sol;strong><&sol;em><&sol;figcaption><&sol;figure>&NewLine;<p>A little foreknowledge can go a long way&period; If employees know in advance what fraud-fighting policies would be enforced&comma; imagine how that will change their behavior or their perception of what could be hidden from management&period; For example&comma; announcing that random audits and inspections would occur&comma; or that vacation time is mandatory for all employees&comma; might help combat some of the temptation to commit fraud&period;<&sol;p>&NewLine;<p>The most recent Global Fraud Study by the Association of Certified Fraud Examiners shows one fraud red flag was identified in 92 percent of the occupational fraud cases they studied&comma; and two or more behavior red flags were identified in 64 percent of cases&period; If these red flags can be identified early in the fraud scheme&comma; the damages can be reduced&period;<&sol;p>&NewLine;<p>The association identified the following as the top five behavioral red flags typically displayed by fraudsters&colon;<&sol;p>&NewLine;<ol>&NewLine;<li>Living beyond one’s means – The employee buys expensive jewelry&comma; takes extravagant vacations or purchases new vehicles that are out of the employees’ salary range&period;<&sol;p>&NewLine;<&sol;li>&NewLine;<li><a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;" title&equals;"Financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"510">Financial<&sol;a> difficulties – The employee purchases everything on credit&comma; the office receives calls from banks requesting payments taken out of paychecks&comma; or collectors call during business hours looking for the employee at work&period;<&sol;p>&NewLine;<&sol;li>&NewLine;<li>&NewLine;<p>Unusually close association with vendors&sol;customers – If employees are often seen associating with vendors or customers outside of work&comma; re-examine these relationships&period; Common fraud schemes involve payments to vendors who are friends&period;<&sol;p>&NewLine;<&sol;li>&NewLine;<li>&NewLine;<p>Control issues&comma; unwillingness to share duties – Sometimes an employee does not delegate duties to others and is unwilling to take vacations&comma; which would require another employee to see his work&period;<&sol;p>&NewLine;<&sol;li>&NewLine;<li>&NewLine;<p>&OpenCurlyDoubleQuote;Wheeler-dealer” attitude – Shrewd or unscrupulous behavior in employees can be a sign of people willing to bend rules to suit their needs&period;<&sol;p>&NewLine;<&sol;li>&NewLine;<&sol;ol>&NewLine;<p>Once employees are trained to spot these five red flags&comma; the next step is for them to act&period; Employers should give employees a way to report fraud concerns&comma; perhaps through an anonymous hotline or a secure comment box&period; If employees identify any of these red flags&comma; they should report them immediately&period;<&sol;p>&NewLine;<p>On average&comma; fraud cases cost businesses &dollar;8&comma;500 a month and go on for 18 months before they are uncovered&period; A group of vigilant employees could shorten the time a fraudster is allowed to go unchecked&comma; saving the business thousands of dollars for each month the fraud is cut short&period;<&sol;p>&NewLine;<p>A recent example of employee misappropriation includes an investigation performed by our firm that was based on a tip given to a local business owner&period; The suspected employee had been with the company for many years as a bookkeeper in the office&period; Duties included maintaining company accounts in QuickBooks&comma; which involved handling accounts payable&comma; payroll&comma; recording daily deposits and reconciling the accounts monthly&period; The suspect wasn’t an authorized signer on the checking account but had access to the signature stamp&period; Apparently&comma; the opportunity to use the stamp proved too great for the suspect&period;<&sol;p>&NewLine;<p>Our investigation uncovered several schemes&comma; which primarily included issuing checks in the perpetrator’s name or to cash and changing the payee in QuickBooks to that of a customary vendor&period; When interviewed and confronted with selected examples unearthed by our forensic accounting procedures&comma; the perpetrator admitted to the schemes and to having a gambling problem&period;<&sol;p>&NewLine;<p>Some behavioral red flags that should have raised suspicion included the purchase of a new vehicle&comma; bank statements with missing check copies and the suspect working on bank statements off premises&period;<&sol;p>&NewLine;<p>Business owners can look to this real-life example for two fraud-prevention steps&colon;<&sol;p>&NewLine;<p><strong><em> Segregate duties<&sol;em><&sol;strong>&period; The reconciliation of accounts&comma; review of bank statements and inspection of paid checks should be performed by someone who isn’t responsible for both check writing and having full accessibility to the accounting system&period; This bookkeeper was given both the lock and the key — he could write a check&comma; post it to the accounting system as a seemingly valid vendor and perform bank account reconciliations to ensure that everything balanced&period;<&sol;p>&NewLine;<p><em> <strong>Lock away the signature stamp<&sol;strong><&sol;em>&period; Only the authorized user of the stamp should have access — this stamp should be guarded as closely as cash&comma; since ultimately it can be used to drain cash from a business’s accounts&period;<&sol;p>&NewLine;<p>Consider these examples as motivation to train your employees to be an army of fraud fighters&period; If everyone knows about the internal fraud-prevention procedures and the five red flags the average fraudster displays&comma; they can help business owners stop fraud before it causes irreparable financial harm&period; If a business owner receives a tip&comma; it should be acted on immediately&period; A fraud examiner can be brought in to analyze financial documents to uncover the fraud&comma; interview the suspected fraudster and calculate the damages&period;<&sol;p>&NewLine;<ul>&NewLine;<li>See more at&colon; http&colon;&sol;&sol;businesspress&period;vegas&sol;learning-curve&sol;train-your-employees-be-fraud-fighters&num;sthash&period;RfXjKWbe&period;dpuf<&sol;li>&NewLine;<&sol;ul>&NewLine;

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FraudsWatch is а site reporting on fraud and scammers on internet, in financial services and personal. Providing a daily news service publishes articles contributed by experts; is widely reported in thе latest compliance requirements, and offers very broad coverage of thе latest online theft cases, pending investigations and threats of fraud.
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