Act on suspicion
Most accountants have seen every trick in the book and know what to look for if they think something may be wrong, although they don’t necessarily say anything to their clients for fear of causing unnecessary alarm or concern – especially if a family member is involved.
It’s really up to business owners to develop a sixth sense because if their gut feel says something’s wrong it usually is. And the most trusted person – quite often a family member – may be the one who is defrauding you.
Those involved in some form of wrong-doing believe their day-to-day activities go unnoticed but an astute manager will pick up on things like the person frequently leaving their work station to take private mobile calls, or starting and leaving work well beyond the normal hours. This should raise the question, why are they putting in extra time? One possibility is that they are about to resign for a job with a competitor and take with them as much of your valuable company information as possible.
Managers must pick up on the tell-tale signs to be ahead of a perpetrator. Pay attention to employees whose lifestyle doesn’t seem to match their pay, or to rumours about sudden changes in wealth. Ensure you have a procedure for other employees to raise any concerns about fraudulent behaviour.
If staff look worried, you have to ask yourself what’s bothering them. If you have intellectual property such as designs, patterns, patents, copyright or systems, you can’t afford to let it fall into the hands of a third party. Make no mistake about it, industrial espionage is alive and well. Be mindful also about sabotage that sometimes follows after an employee has been dismissed. A vengeful employee can cause havoc with a few key strokes of a computer.
Employees who deceive
Employee integrity is a major issue for employers. For example as investigators we might be called in to track an individual whose sales performance is declining for no apparent reason. The product is right, other reps in the company are doing well but this individual is not delivering. Why?
When we report that the sales rep is enjoying long lunches (at company expense) or playing golf a couple of times a week instead of calling on customers, our clients are flabbergasted. But it happens.
We conduct many investigations into people who have been injured in workplace accidents resulting in the employee being unable to work, where we have found the ‘injured’ employee is very active despite a chronic back injury and working for someone else while receiving compensation. Not only are they ‘double dipping’, but the employer’s insurance premium will skyrocket.
WorkSafe Victoria paid out $1.5 billion last year in claims but it is virtually impossible to determine how much of this was obtained fraudulently.
A last word
When it comes down to it, the best approach is to develop an anti-fraud culture in the business, combined with the right controls. Business owners who value two-way communication are able to build an atmosphere of trust and mutual responsibility. Staff who feel valued and treated fairly are far less likely to want to ‘rip off’ their employer.
