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10 Ways To Reduce The Risk Of Employee Fraud Within Your Corporation (Part 1)

September 15, 2015 by  
Filed under Blog

company-theftAccording to a recent study conducted by the Association of Certified Fraud Examiners (ACFE), it has been observed that fraud losses continue to cripple numerous privately held organizations across the United States. Approximately 5% of all revenues are lost annually by these organizations as a result of various types of fraud. Furthermore, it has been estimated that a massive 95% of all businesses are victims of some sort of employee theft.

It is therefore imperative that companies develop a form of system to oversee any fraudulent activity, minimizing its impact! As expert corporate investigator and special investigation services, National SIU offers you some tactics that you can implement:

1.    Conduct Thorough Background Checks on All Employees

In today’s time, it is imperative that businesses conduct a thorough background check on applicants during the hiring process. This is a proactive approach, a way to mitigate risks at grassroots level. Some hiring managers base their judgment of hiring employees solely on the interview. It is important to remember that fraudsters cannot be told apart as easily. In fact, they often come across as efficient and charming potential employees. Make sure someone gets in touch with their former employees to get an accurate picture.

2.    The Matter of Criminal Record

There’s a new twist that has taken the business world by storm: the “Ban the Box” saga that continues to be hot debate. According to this, employers can expect to find themselves in hot water for not hiring minorities who have a prior criminal record. It further goes to claim that the pertinence to criminal record be made prominent only of there were some relevance to the job in question. Make sure to account for that in your hiring policy that prohibits hiring anyone with criminal record.

3.    Set Up & Enforce Strong Procedures

Control policies are best when they are decided on the top, and cascaded down to the management. This goes to send out the lead by example message. When you get your top management to follow these policies, procedures and guidelines, you set a culture of conformity that managers throughout the organization accept.

4.    Beef Up the Security At the Top

In the case of corporate theft, you need to enforce appropriate measures to keep your top managers secure. Chances are that they have access to sensitive information that is available on their electronic devises. Password protection should be top priority, along with firewall protection. Another solution is the installation of overt and covert CCTV systems.

5.    Educate Employees About Various Fraudulent Activities

Focus on creating a strong ethical environment that is supported by the top management. Some employees remain unaware of the line that defines fraud. They may partake in insurance related fraud without even realizing that it is illegal, or against the company policies for that matter! Train and educate them on the policies. Create an open door policy for whistle blowing. Encourage employees to come forward and report any suspected frauds.

That’s it for the first half of our take on employee fraud prevention. Looking for more ways to reduce employee fraud? Read more in the following blog, 10 Ways to Reduce the Risk Of Employee Fraud Within Your Corporation (Part 2).

For more information, call us at 800-960-NSIU (6748).


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