When it comes to fraud from employees, statistics have shown that:


  • Employees who commit fraud against their employer have never done so before
  • Fraud is committed more often by employees that have a tenure of more than 5 years


Regarding fraud from outside of your company, the so called “CEO Fraud” is currently rising, with an average loss of $130,000 per incident. For details, check our blog on Segregation of Duties related to Internal & External Fraud.


Here are 5 suggestions to prevent fraud:


1.)  Never sign a blank check. Checks in general are to be avoided, especially handwritten checks. Too much tampering and misuse can happen here. But the biggest risk is to sign a blank check and hope that the receiver of the check does the right thing. They may, or they may not – you will find only out once it may be too late.


2.)  Reconcile your bank statements regularly, preferably daily. Most banks have a grace period in which deductions from an account, via check, ACH, or Direct Debit, can be reversed. But these timelines are usually very short. And you don’t want to miss out on rejecting the forged check that has been drawn from your account.


3.)  Procurement cards or corporate credit cards for employees are coming with a high responsibility for the employees. Be sure to support the employees by giving them clear guidelines on what can be procured or not, and be very clear regarding personal expenses on a corporate credit card.


4.)If you receive an email from a senior person of the company to initiate a payment urgently, double check it. Imposters use social media to get details about your company, and the email you receive about an urgent payment may only be identified as fraudulent when placed under scrutiny.


5.)Do not change vendor bank accounts just based on an email, check back independently. Don’t call back the number provided on the email. Look up the phone number in your vendor master data or use the internet to get to the company’s main number, and ask to be transferred to the accounts department.


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