Is your organization at risk?
If you operate a business, it’s likely that at one time or another, you will be faced with fraud.
Fraud is a highly problematic issue impacting companies of all sizes, in all industries and sectors. While external threats do represent a portion of fraud risk, all too often the threat comes from within, posed by the very employees trusted to help run an organization.
According to the Association of Certified Fraud Examiners (ACFE), a typical organization loses an estimated five percent of its annual revenue to fraudulent activities. However, the losses associated with fraud typically extend far beyond the misappropriated cash/other company assets, such as reputational damage, lost productivity, loss of future opportunities/donations/support, cost of investigations, cost of prosecution, and the cost to establish safeguards to ensure it doesn’t happen again.
In addition, fraud can take a devastating toll on employee morale, especially in smaller companies where relationships tend to be more tight-knit. The shock of knowing that a trusted employee or colleague was capable of such deceit can perpetuate further mistrust and interfere with everyone’s ability to focus on their job function. Additionally, being associated with a company undergoing a fraud investigation is often embarrassing for employees who might feel they’ll be stigmatized if they choose to pursue a career elsewhere.
The good news? There are a number of steps companies can take to minimize the opportunity for employees to commit fraud, simply by taking a proactive approach. To help you protect your organization, this guide provides an overview of common employee fraud activities, examines typical red flags, offers advice on implementing processes to lessen risk in your organization, and explains what steps to take should fraud occur in your company.