5 Proactive Tasks to Find Fraud

Fraud is a risk to every organization that most business executives choose to ignore. Even those who understand the risk of fraud often feel too busy to make fraud fighting a priority. This is a problem because fraud impacts the organization’s culture and drains resources. While the actual losses caused by fraud can be significant, the emotional burden can also be overwhelming. It is unwise to fail to make fraud prevention and detection a priority.

A few years ago, my lawnmower died. I grabbed the handle to start it, but it wouldn’t move when I pulled it. This had never happened to me before, but there was no fixing this mower. It had run out of oil which caused the engine to seize. This failure was 100% my fault. Over a five or six-year period, I never once checked the oil. I am a handy person who understands how engines work and the importance of regular maintenance. Every so often, I would think about it and put it off until later. I ignored it and put it off because I was focused on getting the yard cut as quickly as possible. This was an expensive mistake, but the price for a new mower is only a drop in the bucket when compared to the money lost to fraud.

Are you ignoring fraud? Are you too busy? How much money are you losing?

The following are five tasks that can help you proactively manage fraud:

1. Review an entire month of bank statements, bank recons and support.
2. Review deleted, reversed or corrected journal entries for a certain period.
3. Review your top sales people’s expense reimbursements for a certain period.
4. Reconcile the direct deposit payroll file that is submitted to the bank.
5. Review transactions performed by your most trusted employee.

You don’t have to do these tasks all in one month. Just pick one or two as a small project. It is important to spend a little time looking for fraud because it can save you a lot of time and money later. Managing the risk of fraud is just as important as performing maintenance on your lawnmower.

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