4 Alarming Facts About Fraud Every Business Owner Should Know
September 22, 2017
Mr. Styles joined the Firm in 2015 after moving from Austin, TX and is registered and licensed to practice as a CPA in Minnesota and Texas. Darin works with businesses, not-for-profits, and bank clients in consultation and preparation of accounting, tax, audit/review, and SOC engagements.
Darin also has experience in a variety of forensic accounting and consultation engagements. He has successfully helped clients build more robust internal controls to prevent fraud and he has worked with clients to reconstruct transactions after the fact. Darin can be reached at 952.449.6212 or email@example.com.
We see headlines about occupational fraud—that is, when an employee deliberately abuses or misappropriates employer-owned resources or assets—all the time. The stories are often sensational and, in many cases, downright shocking. We ask each other: How did that person get away with such a blatant act? What were they thinking? Will the business survive? Rarely can we imagine such a crime happening in our organization.
But fraud can happen in any business, regardless of size or industry. And frankly, the results can be devastating. A recent report on occupational fraud by the Association of Certified Fraud Examiners reveals the following:
1. Fraud can be unbelievably costly.
The median loss from an instance of fraud is $150,000, while nearly 25 percent of instances exceed $1 million.
2. Fraud can be exceptionally difficult to detect.
The average fraud scheme lasts for 18 months before it is detected.
3. While fraud is typically associated with large corporations, it’s actually more prevalent in small to mid-size businesses.
Organizations with fewer than 100 employees are disproportionately victimized. What’s more, the results of fraud are magnified because of their smaller size.
4. The employee who commits fraud may not be the one you’d expect.
Almost 90 percent of fraud perpetrators had never been previously charged with a crime or terminated from their previous employment.
How can you prevent fraud in your business?
Preventing fraud is about identifying and assessing your risks, controls, and key financial ratios. Armed with this insight, you can investigate red flags, remediate weaknesses, and implement strategies that will better protect your business. But for many business owners, this is easier said than done.
If you’re unsure of where to begin, our fraud prevention specialists are here to help. We offer a proven, three-step fraud prevention service package that can be fully customized to your business. Designed to prevent both fraud and accidental loss, it empowers you to leave these worries behind.
Don’t become a statistic.
It can be easy to put off fraud prevention, especially when your to-do list is never-ending. But this could be a costly mistake. Making the move to prevent fraud in your organization is an investment that will likely pay dividends in the years to come—and enhance your peace of mind today. Don’t hesitate to call if you have questions. We’d be happy to help you take the first step.