Staggering workplace fraud statistics
Did you know that a typical organization loses 5% of its revenues to fraud each year? And the median time it takes to detect fraud is 18 months? Smaller organizations suffer the largest median losses due to the fact that these organizations typically employ fewer anti-fraud controls than larger organizations, which increases vulnerability to fraud.*
Who is committing workplace fraud?
The vast majority of frauds are committed by employees in accounting, operations, sales, executive/upper management, customer service and purchasing departments. Perpetrators with the highest levels of authority tend to cause much larger losses. Most fraudsters are first-time offenders with clean employment histories.*
What can you do to mitigate fraud at your business?
To proactively combat workplace fraud, consider conducting an internal audit, or at a minimum, implement strong internal controls. Honkamp Krueger (HK) can assist you with this sensitive issue in several different ways:
- Conduct an internal control review. During this service, an HK CPA who is also a Certified Fraud Examiner (CFE) will review some simple internal controls and provide recommendations to reduce your susceptibility to misappropriation.
- Conduct a surprise bank reconciliation. This service aims to protect the cash assets of your company. If your employees know this occurs, it may prevent fraud from happening in the first place.
- Conduct routine internal audits. During this procedure, a credentialed internal auditor from HK will assist your organization with quality standards, risk management and controls to help ensure your business is running at optimal quality and effectiveness.
While implementing recommendations and proper internal controls won’t guarantee your business will not be a victim of fraud, it will provide the internal controls necessary to reduce the risk and help protect you from devastating losses.