One of the gravest threats to the success of a business is employee theft and fraud. In order to deter incidences of this
nature, organisations generally put in place security policies which help in combating this problem. They are considered to be an organisation’s first line of defence, unfortunately they often do not play as critical a role as they should.
The Association of Certified Fraud Examiners (ACFE) estimates that a typical business will lose an average of 6 percent of revenues from employee theft and fraud. The ACFE Report to the Nation on Occupational Fraud and Abuse reveals that businesses suffer losses because of the limited resources they have to devote to detecting fraud.
To help protect themselves, businesses can implement these three simple steps to combat internal theft or fraud.
Be the best example
The management should set a good example for their employees. A high-handed approach towards the rules and regulations will invariably pass down and reflect in the attitude of the employees. All the employees, irrespective of the position they hold should be held accountable for their actions.
Develop strong internal controls
Internal controls are measures that organisations adopt to maintain efficiency and effectiveness of operations, ensure compliance with all legal parameters, safeguard assets and carry-out regular financial audits. Internal controls address the following issues:
- Access controls: Access to physical and financial assets and information, as well as accounting systems, should be restricted to authorized employees.
- Authorization controls: Develop and implement policies to determine how financial transactions are initiated, authorized, recorded, and reviewed.
- Separation of duties: No employee should be responsible for both recording and processing a transaction.
Conduct regular training sessions
Educate your employees on the various policies related to fraud and theft and the internal controls that you have put in place. Employees should feel discouraged to engage in these sort of activities and know that a violations of these policies can lead to strict disciplinary action. These training sessions should be conducted regularly (at least once a year), and employees should be made to sign an acknowledgment to having received and understood the policies.
To get an in-depth analysis on internal theft and fraud in your organization, I suggest you attend this webinar “The Costs of Employee Theft and What You Can Do About It” by expert speaker Derk J. Boss, an expert with over 30 years of experience in surveillance security and compliance. This webinar will cover all aspects of theft and fraud in the workplace to help you identify vulnerable areas that may be prone to pilferages. It will also help business owners make the most of the tools available to them to avoid future incidences. And lastly, it will reveal several misconceptions about theft and its repercussions on the overall business as well as to the department in question.
