The trust and optimism of business owners and managers never ceases to amaze me. No matter who I approach regarding fraud deterrence services they will tell me that fraud “doesn’t go on around here,” and “I trust my staff implicitly.”
These are the same people who, once a fraud is uncovered, will say, “I never would have suspected (insert name).” Because the employee is trusted, and therefore above suspicion, they are able to get away with stealing for an average of 18 months before anything is detected. I have not, in 16 years of forensic accounting, met the business owner who says, “You know, I figured they had been stealing from me for the past few years.”
Here is the rub. No one thinks fraud is going on in their organization, but according to the Association of Certified Fraud Examiners in their 2010 Global Fraud Study, fraud costs businesses approximately $2.9 Trillion (Yes! with a “T”) per year throughout the world. The truth is that fraud exists, on some level, at virtually every single business. The only real question is, “How much?”
Businesses should recognize that fraud does exist and owners should decide what’s okay–for example, is it okay for an employee to take home a box of pens from the supply room? Owners should also clearly define what’s unacceptable. For example, it’s okay to drink a can of pop from the fridge at work–but it’s not okay to take home cans of it.
Clearly defining the rules and expectations for everyone helps to create a culture of openness and integrity in the workplace. When employers blindly trust their employees, or are too busy or lazy to clearly define policies, owners inadvertently create an atmosphere that is conducive to fraud.
A Certified Fraud Examiner can help to put positive procedures in place to help create a healthy atmosphere in the workplace. A CFE can objectively review policies, procedures, and controls to reduce the probability of a large-scale fraud going undetected.
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