Nearly 80% companies worldwide did not consider it likely that they would suffer from a fraud incident. With companies developing a false sense of security, and failing to take the appropriate anti-fraud actions, it has become the primary reason for the spiralling number of corporate frauds occurring and affecting not only companies, but also stakeholders, including employees, investors, financial institutions, as well as the world’s economy.

Business owners can avert being victims to white-collar crimes. Essential elements in breaking this persistent trend of corporate-wide frauds are internal control and preventive anti-fraud tools. This can be achieved by the following steps:

• First of all, much emphasis should be laid on the company’s ethics and values through a written code of conduct and established ethical standards. The employer must commit to assume and demonstrate these standards through his daily actions and communications in the company.
• Moreover, employees must be empowered and trained to know the acceptable norms, behaviours, and measures to identify and prevent fraud, as well as to be motivated to declare any prohibited and immoral conduct to the attention of the employer. Hence, it is equally important to have a constant flow of communication between the employer and his staff.
• Other than changing the organisational culture, it is equally important to have a proper control, primarily, through audit. Checking and balancing ensures that people cannot commit fraud as easily, since discrepancies in accounting records or unexplained items on reconciliation are prevented.
• Personnel control is also significant. Background screening means that you, as the employer, are forewarned about anyone you are hiring who might have a criminal record. Checking the smallest details on their resumes may indicate if the person does not generally stick to the truth, therefore he would not hesitate to lie again, and deceive in the future.
• In addition, verifying who has access to office equipment, documents and computers is important to prevent any unauthorised use. Changing passwords and locks on a regular basis is, thus, a must.
• Another form of control is through monitoring and supervision. Random spot checks allow discovering any suspicious activities.
• Besides, assigning a particular job or task to only one individual is risky, as he is the only one who is aware of all the transactions, and may correct the recorded figures, after committing a fraud unnoticed.
• Furthermore, an employer should beware of suppliers or customers unrealistically good deals, which are certainly too good to be true.
• Implementation of physical security products such as roller shutters, security grilles and gates can help any business in controlling access throughout the building infrastructure. For further guidance, contact an RSG Security representative on 0208 123 1088.
• Some petty-yet meaningful- signs, or ‘red flags’ denote the symptoms of a business fraud such as, conspiracies among employees, excessive voids/credits, altered or missing documents, duplicated payments, missing Inventory or Physical Assets, or odd transactions- in terms of the frequencies, times, amounts and recipients involved. By learning to recognise these indications early on, employers can tackle the people involved more rapidly and efficiently, such that frauds can actually be avoided.

The estimated cost of fraud to the UK is at £30 billion a year, according to the National Fraud Authority’s Annual Fraud Indicator. As an employer, you have a duty to keep the workplace as safe as possible. Remember that fraudsters never lack new ways to trick you and threaten the security of your business, so start looking for those Red Flags…