Minimizing Fraud Risk

one dollarThis is a guest post from Nick Anderson with Forths Forensic Accountants, based in the UK.

Every company can suffer from fraud schemes. As a manager and founder, it is your duty to introduce practices that will minimize the risk.

The way you do business, the manner in which you handle sensitive information and the ethical code inside the organization will all affect the risk of fraud. Knowing how to interact with your employees and what kinds of fraud prevention experts to consult will be determining for the future of your business.

Hire a Forensic Accountant
A forensic accountant is one of the professionals that your company needs.

Some business owners believe that they are in no way vulnerable and that fraud schemes cannot unfold in their organizations. These beliefs are highly misguided. Being prepared for the worst is the only way to ensure the safety of your company’s sensitive data.

A forensic accountant will assess the security breach risk of the organization and establish the safest practices for your needs. Preventive practices are the only way to do serious damage control and to make sure that nothing bad is ever going to happen.

Do a Background Check on Employees
Even if you feel uneasy about doing background checks before hiring employees, you will have to get involved in such procedures.

Very often, information about a person’s professional past is publicly available. Call one of the candidate’s references or the previous employer to find out more about the individual’s work ethic.

Limit the Number of People Responsible for Company Finances
A large number of people having access to sensitive and financial information means that you will be increasing the risk of identity theft and fraud schemes occurring.

Only a few trusted individuals should be given the right to handle financial information. It is crucially important for you to be involved, as well. Do unexpected inspections and always control the information in the company’s financial books.

Computer Passwords and User IDs
Different levels of access to business information, high computer security and the usage of passwords and IDs are several other ways to protect sensitive data.

Computer security is still highly underestimated by many companies because they believe a hack attack will never occur. Invest in proper computer maintenance. Hiring a computer expert to be onsite throughout the workday is another great idea.

Each employee should have access solely to the files that are needed to do their work. Multiple levels of access and a strict hierarchy of information should be introduced from day one. Keep in mind that most of the securities breaches businesses suffer from happen inside the company itself. Limited access to information is the only sensible method of protection.

Educate Employees about Fraud Prevention
Educate employees about the risk of fraud and make sure everybody is instructed how to act in the case of fraud suspicion.

Often, fraud goes unnoticed because employees lack the training needed to detect its warning signs and to act properly. A fraud awareness training is a brief sessions that could potentially save you a lot of money in the future.

Even if you are fully prepared, fraud can occur at your company. Still, taking the right precaution measures will decrease that risk. You are the only individual responsible for the security and the growth of your business. Hire the right professionals, educate your employees and restrict the access to sensitive information. These are some of the main steps to implement in an attempt to keep fraud possibilities under control.

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About Paul McCormack
I have over 17 years of experience in corporate fraud and intellectual theft prevention, detection and investigation. Unlike many fraud experts, I have both industry and professional services experience. To date, I have conducted over 500 interrogations of fraud suspects including numerous senior corporate executives. As a freelance writer, I have written over 100 articles on a broad range of topics including accounting, banking, cloud computing, corporate governance, corruption, cyber security, executive protection, fraud, insurance, human resources, intellectual property, social media, and supply chain management.

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