"Protect Yourself From Fraud" Report Series

 

Think you're not at risk for fraud?  Think again!
   Remember:  All fraud is committed by trusted employees... 


Fraud_is_Committed_by_Trusted_EmployeesA series of reports that helps to explain: 
   "Why small businesses are so vulnerable 
      to fraud and ways you can protect yourself..."

 

Protecting Yourself from Fraud: An Introduction
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (12/15/03)

Theft doesn’t have to happen with a gun. You can be robbed in broad daylight while you’re out working on a job site, as you sit at your desk talking to a vendor, or while you’re on vacation. And you may never know it happened.

Are You At Risk? Protecting Yourself From Fraud
Author: Diane C.O. Gilson, CPA
Re-printed from Nation’s Building News (1/26/04)

There are many scrupulously honest, dedicated and loyal employees who would never dream of defrauding their employers. But, unfortunately, there are far too many frauds committed against innocent business owners by employees who are “wolves in sheep’s clothing.”

Why are small businesses so vulnerable? The following information will help you become more knowledgeable so that you can begin to protect yourself.

Good Self-Defense Strategies Will Help Protect Your Business from Fraud
Author: Diane C.O. Gilson, CPA
Re-printed from Nation’s Building News (2/9/04)

Controls are key to self-defense. Several universal concepts come into play whether you’re defending your life, your honor or your assets (on behalf of yourself, your family, employees, vendors or customers). Use the following self-defense strategies to protect your business from fraud.

Lifestyles can be Red Flags: Know the Warning Signs of Fraud
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (3/1/04)

When professionals investigate a fraud after the fact, they often discover that company owners or management overlooked or ignored obvious warning signs. Because fraud often is committed by trusted employees whom owners know well, it pays to look out for employee lifestyle issues that may be “red flags” indicating a fraud risk.

Strange Behavior: Warning Signs of Fraud
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (3/30/04) 

Certain workplace behaviors can tip you off that an employee may be helping themselves to your company's assets. Here are some warning signs to watch out for.

Review Your Accounting Reports to Protect Yourself from Fraud
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (5/10/04)

It’s never a good idea to let financial reports pile up without reading them. Not only will you lose out on the opportunity to use the data to improve your company’s operations, but you could be ignoring some obvious fraud indicators. Ignorance is not bliss when it comes to fraud. Here’s what to look for when you review your financials.

Do Your Financial Statements Add Up? If Not, Be Alert to Fraud!
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (6/7/04)

Don’t make the mistake of having someone review your financial statements and management documents for you because you don’t understand them or don’t have the time to review them yourself. Thieves could be hiding the evidence of their dirty deeds in doctored documents. Insist on regularly receiving financial statements and management documents at a specific time each month. Then, take the time to become very, very familiar with them.

Here’s how to spot something out of the ordinary and uncover fraud. And at the very least you’ll become a more knowledgeable business owner.

Protecting Yourself from Fraud: Watch for Warning Signs from Others
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (7/5/04)

Being personally vigilant around your office can help prevent fraud. But it’s just not possible to see everything and be everywhere at once. Maximize your watchfulness by keeping your ears open, too. Employees, vendors and customers may give you clues that someone may be stealing from your business. They might be looking out for your best interests; simply following procedures; or resolving questions, issues or complaints from their side of the table. Regardless of their motives, it pays to listen.

Get Smart - Initiate Controls to Protect Yourself from Fraud
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (8/16/04)

Owners of small- and medium-sized businesses are generally at a greater risk for fraud and embezzlement than the owners of large companies. Why? Because they haven’t created the controls necessary to protect themselves.

Here are some examples of basic controls, and some big picture ideas about how you could easily upgrade some of your internal safeguards.

How to Implement Controls That Will Help Protect You from Fraud
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (11/22/04)

If your business has assets, you’re at risk for having them stolen. As we discussed in the previous article, “Get Smart — Initiate Controls to Protect Yourself From Fraud," you need a series of controls (systems and procedures) to protect your assets and prevent fraud from occurring.  There are a number of specific ways in which you can create reasonable, cost-effective controls and put them in place in your company

Fraud Safegaurds Are Only As Effective As Employee Follow-Through
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (12/20/04) 

A system of controls designed to safeguard your company’s financial assets is only as effective as the people who use it. It’s important to set aside time to explain the importance of controls to your employees and get their buy-in about using fraud-prevention measures.

The Cost of Unproductive Employees
Author: Diane C.O. Gilson, CPA
Reprinted from Nation's Building News (3/21/05)

When you trade money for an asset, you own tangible property. You can touch it and feel it ― and you’d certainly know if it disappeared. Now, think of the money you pay your employees. Are you receiving tangible assets in return for your investment, or is the return on this investment disappearing over time?