3 Brave Ways To Condemn Workplace Fraud as a Business Owner

If you’ve ever caught someone at your company stealing, you may feel like it’s not worth the hassle of confronting them. But if you want to condemn workplace fraud as a business owner, some brave steps can help make sure this never happens again. Here are three ways that will help deter fraudulent activity in your company, while keeping employee relationships in mind.

Encourage Whistleblowing

Whistleblowing refers to the reporting of a crime or misconduct committed within an organization to the relevant authorities. For example, organizations may have policies requiring employees to report malfeasance, either directly or through officially designated persons (internal whistleblowing). In addition, external companies like https://whistleblowerinfocenter.com/resources/blog/what-is-whistleblowing/ might offer protection against reprisals for doing so (external whistleblowing).

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For example, suppose you suspect that one of your employees is defrauding the company. In that case, it’s essential to create an environment in which people feel safe enough to speak up without fear of retribution. Encouraging this in the workplace will help protect your company from fraud.

Conduct Surprise Audits

Audits refer to the examination of accounts, records, and other information regularly.

Conducting audits randomly may help you find any wrongdoing before it becomes excessive and costly for your business. In addition, surprise audits will ensure that no employee knows when one might occur, so there’s more transparency throughout the process from beginning to end. Everyone involved knows there are no exceptions to the rules.

Conducting audits properly will help reduce fraud within your company and protect you from potential risks down the road. The main advantage of conducting surprise audits is that it will help you prevent fraud from occurring in the first place.

Small business owners need to regularly conduct random internal and external audits throughout their company as part of an overall strategy to reduce exposure risk, limit potential losses, and to promote responsible use of assets everywhere within their organization.

Implement Segregation of Duties

You segregate duties when you assign employees to specific tasks and activities. It limits the opportunity for fraud, because it is more difficult for a single individual to commit a fraudulent act if their efforts are limited to one task or activity.

Segregating duties also makes identifying those involved in committing fraud easier because it focuses on those employees whose job responsibilities impact the area of fraud that occurred.

Think about this scenario: an owner suspects that someone is stealing and cashing incoming customer payments. To investigate, the owner would review the work performed by staff members who prepare and send invoice, and workers who receive incoming payments.

This segregation reduces the risk of mistakes leading to non-payment of goods or services provided to the business.

Take Action Now

In conclusion, there are several things business owners can do to discourage fraud and misconduct within the workplace. First, employees who notice irregularities or fraudulent activity should be able to report the activity using anonymous channels, such as hotlines or compliance websites. These tools encourage whistleblowing.

Second, conduct surprise audits regularly, without warning employees in advance of the audit. And lastly, segregate duties among those with access to financial information and assets.

These steps it more difficult for any individual to perpetrate fraud, because they will not have unrestricted access across multiple departments and functions of its operations.

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/