Small businesses have it rough. They are particularly vulnerable to fraud because they lack the resources to implement complete systems of internal controls and properly segregate accounting duties among their limited staffs. However, small businesses don’t have to be rife with fraud.
The five most common fraud schemes for organizations with fewer than 100 employees in the Association of Certified Fraud Examiners 2012 report are as follows:
- Billing fraud
- Check tampering
- Expense reimbursement
- Corruption schemes such as bribery, illegal gratuities, and kickback arrangements
The largest number of perpetrators in the entire study, 41.5 percent, had been with the organization between one and five years, most of them had a college degree and worked in the accounting area.
In many small businesses, the major reason fraudsters can commit their crimes is because management trusts them so much. They are family members or longtime friends, or they have proven work records and years of service. That high trust level enables fraudsters to hide their activities. Even when business owners find suspicious behavior, they often believe it is inconceivable that employees would violate these trusted relationships. So, consequently, they hesitate to investigate, which results in much larger frauds.
GET THE HELP YOU NEED NOW! If you suspect anything, you probably need our services and the further you delay calling, the larger and larger the fraud dollars and loss to you and your business. Call today to 501-224-0610 and ask for Ann Dorsey.