When any type of fraud, including employee fraud, is discovered, it\u2019s usually by surprise. That\u2019s because most of us aren\u2019t used to looking for criminal behaviour inside our own organisation. We trust our employees and co-workers, and we keep our focus on succeeding as a team and accomplishing our goals for the business. Nobody wants to think that someone might be subverting the rules for their own personal gain.<\/p>\n
Unfortunately, though, fraud does happen. The statistics tell us that on average, organisations lose about 5 percent of their total revenues to fraud. If that\u2019s not bad enough, the average fraud lasts 18 months before being discovered \u2013 if it is discovered at all (ACFE, 2020<\/a>).<\/p>\n One of the problems is that, since we aren\u2019t looking for fraud, we sometimes don\u2019t want to believe it when we do encounter its red flags. Though they may be unmistakable to some, when it involves our trusted co-workers (and even our superiors) sometimes we try to rationalize or ignore those signs altogether. Accounting discrepancies are one thing, but what about the more subtle things \u2013 like behavioural red flags? The following are a few examples:<\/p>\n Now, these are just warning signs. None of them mean that fraud is definitely taking place. But it\u2019s worth noting that, according to the ACFE, \u201cat least one of these seven red flags had been identified before the perpetrator was caught in 76% of all cases.\u201d<\/p>\n When such behaviours are put in the context of real discrepancies, such as accounting problems, missing cash or inventory, or other issues, a picture of fraud can begin to take shape. While most fraud is discovered by accident, having employees who are trained to recognise red flags is no accident and makes your organisation better protected in the long run.<\/p>\n So, now you\u2019ve discovered fraud in your organisation. What happens next?<\/p>\n Depending on your company\u2019s anti-fraud policy, you should follow the proper reporting channels. Many organisations have an anonymous reporting system, such as a hotline or online module, through which they can report suspected fraud without fear of retaliation. Such a system is highly recommended, as it directly results in more fraud tips and helps you uncover bad behaviour sooner, before it\u2019s done the most damage.<\/p>\n Organisations that don\u2019t have their own anti-fraud professionals on staff should engage an outside firm that specialises in financial investigations whenever fraud is suspected. These experts will review your fraud tip and lead your organisation through the next steps.<\/p>\n Only seasoned experts should engage in an investigation because improper evidence collection can harm the potential to bring a case to court, should it rise to that level. Also, professional fraud investigators have an understanding of privacy laws and know what is and isn\u2019t admissible in terms of gathering evidence in the workplace.<\/p>\n Part of the evidence-gathering phase, witnesses should be interviewed to draw a clear picture of what has taken place. They should be interviewed individually by anti-fraud professionals, who know how to elicit the information they need to uncover the truth.<\/p>\n As the investigation proceeds, if fraud appears to be a proven concern, the employee should be terminated from employment and law enforcement should be informed. Without prosecution, the fraudster will just move on to their next victim.<\/p>\n How did this fraud happen? Were anti-fraud measures too weak, or were they not properly followed? Now is the time to evaluate risk management and control systems to learn from this case, and prevent the next fraud. Due diligence experts should be engaged to provide an objective, thorough examination of your control systems and make recommendations that will improve your level of protection.<\/p>\n CRI Group has experts who have conducted fraud investigations all around the world, for organisations of all sizes and industries. Our investigators work on-site at your company bringing a boots-on-the-ground approach to uncovering all the facts of the case. When you\u2019ve uncovered fraud, that\u2019s the time to let the experts take over. You owe it to yourself and the future of your business to make sure every investigation is done professionally and effectively. Contact CRI Group<\/a> to learn more about our fraud investigations today.\u00a0Get a FREE QUOTE<\/a><\/strong><\/p>\n CRI Group has safeguarded businesses from any risks, providing\u00a0investigations<\/a>\u00a0(i.e.\u00a0insurance fraud<\/a>),\u00a0employee background screening<\/a>,\u00a0investigative due diligence<\/a>,\u00a0business intelligence<\/a>,\u00a0\u00a0third-party risk management<\/a>, forensic accounting, compliance and other professional investigative research services. In 2016, CRI Group launched\u00a0Anti-Bribery Anti-Corruption (ABAC\u00ae) Center of Excellence<\/a>\u00a0\u2013 an independent certification body established for\u00a0ISO 37001:2016 Anti-Bribery Management Systems<\/a>,\u00a0ISO 37301 Compliance Management Systems<\/a>\u00a0and\u00a0ISO 31000:2018 Risk Management<\/a>, providing\u00a0training<\/a>\u00a0and\u00a0certification<\/a>. ABAC\u00ae operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals.\u00a0Contact\u00a0ABAC\u00ae for more<\/a>\u00a0on ISO Certification and training.<\/p>","protected":false},"excerpt":{"rendered":" When any type of fraud, including employee fraud, is discovered, it\u2019s usually by surprise. That\u2019s because most of us aren\u2019t used to looking for criminal behaviour inside our own organisation. We trust our employees and co-workers, and we keep our focus on succeeding as a team and accomplishing our goals for the business. Nobody wants […]<\/p>","protected":false},"author":1,"featured_media":6276,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,13,146,10],"tags":[31,32,33,34,35,30],"class_list":["post-6267","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-due-diligence","category-employee-background-check","category-resources","category-third-party-risk-management","tag-anti-corruption","tag-anti-fraud","tag-bribery","tag-compliance","tag-corruption","tag-risk-management"],"gutentor_comment":0,"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\n
1. Report it<\/strong><\/h3>\n
2. Begin an investigation<\/strong><\/h3>\n
3. Gather evidence<\/strong><\/h3>\n
4. Interview witnesses<\/strong><\/h3>\n
5. Contact law enforcement<\/strong><\/h3>\n
6. Review and update your anti-fraud controls<\/strong><\/h3>\n