Simple tips for protecting your business from insider fraud
Every business is full of different kinds of risks. Both internal and external stake holders in the business can commit a fraud which could be detrimental to the growth or even existence of a business. Insiders have lot more knowledge and understanding of a business and thus have an advantage if they intend to commit any sort of a fraudulent activity. It becomes absolutely necessary that your business remains protected from such unlawful activities all the time. Any thoughts of an intended fraud should be put on hold by establishing various check and balances in the business processes and infrastructure so it can be well protected. Following are some of few simple tips which would be helpful for most of the commercial establishments in protecting their businesses from insider fraud.
First and foremost important step in creating a deterrent for those intend a fraud is a strong message and intention on part of the top management in controlling such a menace. This message should be passed on to the organization in forms of creating effective control mechanisms and keeping them in proper shape all the time. The business cheques should always be signed jointly by at least two signatories. Beyond a certain limit these cheques have to be signed by someone in the management.
One most always remember a golden rule that employees who don’t have much trust of the management are least likely to commit a fraud. In fact more the number of years a employee has worked with you there are more possibilities that he may commit a fraud compared to someone who has worked with you for fewer number of years. So do not trust anyone blindly.
One should conduct regular inventory counting and thoroughly investigate any shortages found in such a check. The responsibility of inventory counting should be given to anyone else other then the store keeper or inventory clerk. Similarly, bookkeeper should be not allowed to mail or deliver cheques. You should always appoint someone other than the bookkeeper for this job. Periodic departmental and inter-departmental audits should be carried out and employees encouraged of being vigilant about activities of their colleagues. A box may be set up which can be used by employees to drop in their observations regarding any suspicious activity they have noticed.
While employing someone new a thorough background check should be done before handing over the appointment letter to them. And no tolerance should be shown towards someone found involved in anything hanky-panky.
In much bigger organizations the situations are more complex and need proper management to curb insider fraud. Expert Financial Forensics experts could be hired to investigate a possible fraud or create processes which would make your company more resistance to insider frauds.
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