Fifty-six per cent of companies surveyed by PricewaterhouseCoopers last year said they experienced an economic crime in the previous 12 months. Of the affected businesses, 83 per cent reported asset misappropriation, or the theft of tangible assets, and 31 per cent reported accounting fraud (some firms recorded more than one instance).
The resulting damages can be drastic. Twenty-four per cent of affected companies estimated their direct fraud-related losses to be greater than $500,000 (U.S.).
To limit the number and impact of fraud cases, experts suggest implementing prevention techniques. Internal employees and external fraudsters are less likely to try something if they think there is a good chance of getting caught.
Prevention tips include:
Instituting defined roles: A bookkeeper should not be able to sign cheques.
Controlling access to information: Too often, sensitive contracts and data fall into the hands of junior employees.
Abiding by internal security measures: If an employee has signing permissions up to $10,000, make sure the limit is monitored.
If you think there has been fraud, the following will help detect it and provide appropriate responses:
Set up a fraud hotline: Firms such as ClearView Strategic Partners and WhistleBlower Security can install anonymous phone lines and e-mail accounts for employee use if they suspect something is wrong
Have a forensic accountant and investigator in mind: The first 24 to 48 hours after fraud is detected are the most crucial, so you can't afford to waste time.
Compiled by Tim Kiladze
Tim Kiladze