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5 fraud tips for every small business owner

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  1. Be Proactive.  Adopt a code of ethics for management and employees. Evaluate your internal controls for effectiveness and identify areas of the business that are vulnerable to fraud.  Are fraud risk assessments performed to proactively identify the organization’s vulnerabilities to fraud?  Are strong anti-fraud controls in place and operating effectively? 
  2. Establish Hiring Procedures.  When hiring staff, conduct thorough background investigations. Check educational, credit and employment history (as permitted by law), as well as references.
  3. Train Employees in Fraud Prevention.  Do workers know the warning signs of fraud? Is ongoing anti-fraud training provided to all employees of your organization?  Ensure that staff members know basic fraud prevention techniques. 
  4. Implement a Fraud Hotline.  Fraud is still most likely to be detected by a tip. Providing an anonymous reporting system for your employees, contractors and clients will help uncover more fraud.  Is an effective fraud reporting mechanism in place?  
  5. Increase the Perception of Detection.  Is possible fraudulent conduct sought out or dealt with during or after it occurs? Communicate regularly to staff about anti-fraud policies, ways to report suspicions of misconduct, and the potential consequences.

Fraud Prevention Checklist

  • Is ongoing anti-fraud training provided to all employees of your organization?
  • Is an effective fraud reporting mechanism in place?
  • Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?
  • Is the tone at the top one of honesty and integrity?
  • Are fraud risk assessments performed to proactively identify the organization’s vulnerabilities to fraud?
  • Are strong anti-fraud controls in place and operating effectively?
  • Does the internal audit department, if present, have adequate resources and authority to operate effectively and without undue influence from management?
  • Are employee support programs in place?
  • Is an open-door policy in place that allows employees to speak freely about pressures?
  • Are regular anonymous surveys conducted to assess employee morale?











eFraud Prevention™, LLC