There is always an obligation to protect your company’s valuable assets in any workplace. Occupational fraud and hand fraud can happen to anyone, even if it’s someone in your family. Fraud can take many forms, including hand-time card fraud and theft of company funds. To prevent bigger disasters, it is important to recognize the signs of fraud.
Many behavioral red flags can be used to indicate hand wrongdoing. It is more difficult to detect fraud than actual hand theft. To reduce fraud risk and increase your chances of catching fraudulent employees within your company, keep your eyes open and your observance sharp. Early detection can cut down on fraud losses, as corporate frauds are usually continuous. There are times when you need assistance from a professional, i.e Private Detective agency, which isn’t involving the police.
We are here to help you identify the signs of employee fraud in the business and provide you with the information to stop employee fraud from going unnoticed.
1. Employee Fraud: Employees at High Risk
Identify suspicious employees. If someone is stealing from the company or has something to hide, their demeanor could be closed-off and secretive. They may also act defensively.
An employee who doesn’t take their contracted vacation period is another common indicator. This is usually because they don’t want someone to cover their work while they’re away, possibly leading to the discovery and prosecution of fraud.
These high-risk employees could also include:
- Are you in debt?
- you are facing mounting bills because of unforeseen circumstances like a divorce or a family illness
- Have a history of drug abuse
- Are involved in high-risk activities, such as gambling or risky investments
It might be time for an employee to look closely at their behavior if they seem to be motivated by fraud.
2. Employee fraud: Access & Chance
High-risk employees include those in financial service roles like a CFO, Accountant, or Bookkeeper, and those responsible for Accounts Receivable/Payable.
An employee must have access to information and the opportunity to commit fraud. Access to bank accounts, records, and accounting information. The opportunity to use this access. For example, someone who can sign and cut cheques, manage accounts payable, and reconcile the books.
3. Employee Fraud: Employee Control
Employee fraud is not just about access. Employees who have control over certain aspects of their jobs should be monitored.
They may, for instance, insist on:
- Working unnecessarily many hours
- Working outside regular business hours
- Performing specific job duties and refusing to share certain tasks
- Only deal with one supplier or vendor
The common scam of “purchasing fraud” is when a vendor or supplier inflates an invoice amount and the employee cuts a check. Both parties then split the difference.
What are “red flag” scenarios?
You should be paying attention to your financial records and looking into the following issues:
- Payees that are not the same as the general ledger name.
- Two cheques for the same amount have been issued to the same vendor in the same time period. One may have been authorized if supporting documentation is available.
- Unprofessional invoices: A vendor or supplier with questionable records (i.e. obvious errors, missing or incorrect address, non-existent website presence, and/or an incorrect home address
It is possible to spot employee fraud, but prevention is better. You should ensure that financial roles are segregated, control access, opportunities, and control, and that you have accurate and up-to-date bookkeeping in order to catch any red flags before it is too late. There isn’t one solution to deal with the huge danger of employee fraud. A private investigator who has experience can help you catch fraudsters in your business even when the police aren’t efficient. If you require assistance in locating somebody, you’ll have to find the Best Detective Agency in Dehradun.
