Focused Fraud Prevention Services address the need for accountability and internal procedures to minimize and hopefully prevent fraud.
Fraud is more prevalent than you think
Employee fraud is a significant problem faced by organizations of all types, sizes, locations and industries. While we would all like to believe our employees are loyal and working for the benefit of the organization (and most of them probably are), there are still many reasons why your employees may commit fraud and several ways in which they might do it. According to the 2014 Report to the Nation on Occupational Fraud and Abuse (copyright 2014 by the Association of Certified Fraud Examiners, Inc.), research shows that the typical organization loses 5% of its annual revenue each year due to employee fraud. Prevention and detection are crucial to reducing this loss.
Every organization should have a plan in place as preventing fraud is much easier than recovering your losses after a fraud has been committed.
Types of Fraud
Fraud comes in many forms but can be broken down into three categories: asset misappropriation, corruption and financial statement fraud.
Asset misappropriation, although least costly, made up 90% of all fraud cases studied. These are schemes in which an employee steals or exploits its organization’s resources. Examples of asset misappropriation are stealing cash before or after it’s been recorded, making a fictitious expense reimbursement claim and/or stealing non-cash assets of the organization.
Corruption fell in the middle and made up less than one-third of cases. Corruption schemes happen when employees use their influence in business transactions for their own benefit while violating their duty to the employer. Examples of corruption are bribery, extortion and conflict of interest.
Financial statement fraud comprised less than five percent of cases but caused the most median loss. These are schemes that involve omitting or intentionally misstating information in the company’s financial reports. This can be in the form of fictitious revenues, hidden liabilities or inflated assets.
3 Ways that Focused Helps You to Avoid Fraud
Most entrepreneurs have limited experience creating internal controls and systems. They hire staff that are trustworthy … hopefully … and provide some training in how things should work. While no-one expects or wants fraud to occur, it is not uncommon, and is often undetected.
1. Focused Institutes Separation of Duties
The person writing your checks will not be reconciling the bank accounts.
Check tampering and billing schemes are common in small businesses. Our separation of duties serve as a strong deterrent to opportunistic fraudsters.
Focused reduces your risk for financial fraud by comparing and analyzing each canceled check, reviewing audit trail reports, locking down prior periods and ensuring several sets of eyes are watching your accounts for any warning signs.
2. Focused Applies the Team Approach
You’ll have at least 2 sets of eyes: a senior bookkeeper and a controller reviewing your books each month.
Our disciplined procedures mean fraudsters have no where to hide their crime, and that delivers great protection and peace of mind to the business owner.
All of our employees are heavily screened and background checked, and because we work in teams with multiple layers of oversight, you can rest assured that if someone is is trying to rip you off, it is much more likely to be exposed.
As added precaution, Focused carries insurance coverage for professional liability and employee dishonesty.
3. Focused Leverages Technology
By automating your financial systems and streamlining processes, Focused helps your business improve efficiencies and reduce your risk for fraud. Now, your employee can’t write herself a check and change the payee to Telus if a scanned bill needs to be attached supporting every payment.
As an additional precaution, save time and trees by moving to The Focused Portal – our secure, cloud-based document management system.