A Report to the Nation on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners provides a wealth of valuable information for any company. According to the report: Organizations with fewer than 100 employees have a higher rate of fraud exposure to billing, check tampering, skimming, expense reimbursement, cash on hand, payroll, and larceny than their counterparts do.
Conversely, employers with more than 100 employees have a greater exposure to corruption and non-cash theft. The most common anti-fraud controls include audits, codes of conduct, management review, hotlines, and training.
Companies with 100 or more employees are almost twice as likely as smaller organizations to employ anti-fraud controls.
It generally takes some time to detect fraud. Financial statement fraud had a median duration of 27 months. Check-tampering, expense reimbursement, billing, and payroll scams 24 months; corruption, cash on hand, skimming, and larceny 18 months.
The list of fraud examples is instructive:
- Skimming a small percentage of cash payments or assets.
- Accepting payment from a customer, failing to record the sale and instead pocketing the money.
- Stealing cash and checks from daily receipts before they can be deposited into the bank.
- Creating a shell company and billing employer for services not actually rendered.
- Purchasing personal items and submitting invoices to employer for payment.
- Filing fraudulent expense reports for personal travel, nonexistent meals, etc.
- Stealing blank company checks, and making them out to themselves or an accomplice.
- Stealing outgoing checks to a vendor and depositing them into their own account.
- Claiming overtime for hours not worked.
- Adding ghost employees to the payroll.
- Fraudulently voiding a cash register sale and stealing the cash.
- Stealing inventory from a warehouse or storeroom.
- Stealing or misusing confidential customer financial information.
Nearly one in five frauds were exposed by tips from fellow workers. Many organizations provide employee-tip hotlines. Perhaps you should too. Click Here to read the report.