Red Flags for Workplace Fraud
Workplace fraud can take many forms, whether it’s purchasing a few groceries on the company credit card, taking office supplies for personal use at home, right through to large-scale theft of equipment and money. While in many cases fraud is dealt with by termination of employment, sometimes it also involves a police investigation and possible imprisonment.
A 2014 study by accounting firm PWC surveyed 5,000 organisations of various sizes and sectors across the globe. More than one-third of respondents said they had been struck by economic crime. The most common types of economic crime were:
- Procurement fraud.
- Bribery and corruption.
- Accounting fraud.
Red flags for the risk of workplace fraud
Various analyses of workplace fraud carry a common message: Prevention is better than cure. If organisations are aware of the risk factors for workplace fraud, they may be able to take steps to prevent it. It may be surprising that greed is not considered to be the most significant motivator. Here are three of the main motivating factors behind workplace fraud.
- Dividing responsibility so that no single person is responsible for managing company funds and assets.
- Establishing good regulation and controls so that books are regularly checked and employee activities are accounted for.
- Continually educate staff about what constitutes fraud and what is unacceptable conduct. Workplace policies should also detail these things.