Preventing Employee Fraud: Top Ten Tips
Research shows that small businesses are often more vulnerable to fraud than their larger counterparts because they have fewer employees. Companies with fewer employees tend to have less segregation of duties and fewer internal accounting and auditing controls. Closer relationships and trust occur between small business owners and their employees which reduces suspicion and makes the business more susceptible to employee fraud.
Small businesses can protect themselves by making employee fraud prevention a priority. The following guidelines are essential for developing a fraud prevention program for your small business:
Remember, by nature, fraud is hidden. There is no 100% guarantee to avoid fraud. Research has shown one of the most important deterrents to fraud is 'tone at the top.' Management stance on ethics has a direct effect on employee behaviour. The first goal is to prevent fraud and the second is to catch it as quickly as possible.
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