Categories: News Articles

Defenses To Stop Inside Jobs of Employment Theft

MoneyIf you’re like most small businesses, your biggest security mistake is planning for threats only from the outside (customers, clients, vendors, etc.) —not from those near and dear to you (EMPLOYEES).

Fraud is five times more likely to be committed by employees than nonemployees.

HERE IS WHAT YOU CAN DO TO HELP LIMIT EMPLOYEE FRAUD:

IMPROVE BACKGROUND CHECKS—Talk to references given to you by prospective employees. Employ integrity testing (ie: drug tests, credit reports, DMV checks). There is a national database of workers fired for dishonesty (cost $4.00 per name check. Call 800-860-0343)

FOLLOW THE MONEY – Tighten access to cash flow. Most frauds are carried out by employees in accounting and finance roles. Keep closer track on inventory and any close relationships between employees and suppliers. Randomly review records for inconsistencies.

DIVIDE FINANCIALLY RELATED TASKS –  For example, the worker who opens mail should not reconcile accounts. Have two people check incoming inventory.

LIMIT THE NUMBER OF APPROVED CHECK SIGNERS  and rotate those who handle checks or inventory. Have multilayered password access to company computers and change passwords often. Turn on the audit trail function in your accounting software to track who’s been using the system.

REMIND STAFF OF ANTI FRAUD POLICY OFTEN  – Make your strong anti-fraud policy clear in interviews, orientation, and annual reviews. Set up a reward system for reporting in-house theft.

UTILIZE POSITIVE PAY check writing system to prevent use of fraudulent checks.

INVESTIGATE AND PROSECUTE – ONCE OTHER EMPLOYEES SEE THAT YOU MEAN BUSINESS, YOU WILL HAVE A BUSINESS BECAUSE YOU WILL BE LIMITING THE IN HOUSE FRAUDULENT THEFT.


If you have any questions or require further info please call 718-531-1105 or send an email.


This web site and these articles are not tax or legal advice and are not intended as tax or legal advice.  They are intended to provide only general, non-specific legal information and are not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This web site and these articles are based on United States law.  You should consult with an accountant or lawyer familiar with the issues. This web site and the articles contained on this web site are not solicitations.

Contact Info:

Ronald Semaria
Semaria Consulting
1408 East 66th St
Brooklyn, NY 11234
Email: info@semaria.com

Phone Numbers:

Phone: 718-531-1105
Toll-Free: 866-531-1105
Toll-Free: 888-IRSAUDIT
Toll-Free: 888-RONTAXES
Fax: 718-444-7152

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