September 17, 2020
Our New Jersey accounting experts want you to be aware of the threat of occupational fraud so you can protect your business.
What is Occupational Fraud?
Occupational fraud is a type of fraud committed by employees against employers. This could come in many forms, such as stealing or misusing company property (known as “asset misappropriations”), corruption or falsifying documents or accounting records. Between January 2018 and September 2019, 2,504 cases of occupational fraud were investigated worldwide.
How Can You Protect Your Business?
Our team recommends mitigating the risk of occupational fraud for your business in the following ways:
- Establish a code of conduct. This can go a long way in strongly reducing incidences of occupational fraud. A study conducted by the ACFE found that there was a 56% reduction in median fraud losses when a corporate-wide code of conduct was in place.
- Conduct background checks on new employees. Regardless of how much you trust your new hires, conducting a background check can uncover past fraudulent activity you wouldn’t have otherwise known about, especially if the employee has access to major payment accounts.
- Split your accounting duties, or outsource them. A big gateway to potential fraud is one employee controlling all your business’s finances. In order to minimize the risk of occupational fraud, seek to divide the accounting duties among several employees. Additionally, you may outsource your accounting needs to a CPA who does not have the extent of knowledge that an employee has about your business.
The experts at Frank W. Kapitza & Associates help small and midsized businesses prevent occupational fraud by using efficient accounting tools. Outsource your needs to us by calling (973)-276-0650, or sending us a message through our website!
