Before we delve into the “how”, we must first ask ourselves, what is “occupational fraud”? The term “occupational fraud” refers to a fraud that has been committed by an employee, against their employer. It is defined as the use of one’s occupation for personal enrichment or gain through the deliberate misuse or misapplication of the employing organisations resources or assets.
If you think this does not apply to you or your business, think again. According to the Association of Certified Fraud Examiners, occupational fraud costs organisations an estimated 5% of their annual revenues. As a result, organisations must take proactive measures to protect themselves from this type of fraud in order to keep their business running smoothly and reduce the risk of loss.
There are three primary types of occupational fraud: asset misappropriation, corruption, and financial statement fraud. Asset misappropriation is the most common type of fraud, accounting for approximately 75% of all occupational fraud cases. Corruption is the second most common type of fraud, accounting for approximately 20% of all cases. Lastly, financial statement fraud is the least common type of fraud, accounting for approximately just 5% of all cases.
While no organisation is immune to occupational fraud, implementing preventative measures can help to reduce the risk of fraud occurring.
What steps should I take to protect my business from occupational fraud?
The answer is not a simple one and protective methods can vary from business-to-business depending on the type of industry in which you operate, the size of your business or organisation and other such variables.
Organisations can protect themselves from occupational fraud by implementing preventative measures and taking proactive steps such as background checks, establishing internal controls, and creating a code of ethics. Background checks can help to identify individuals with a history of fraud or financial crimes. Internal controls can help to deter and detect fraud. A code of ethics can help to set the tone for an organisation and provide guidance on how employees should conduct themselves.
The team here at GW &Co are experts in finance and loss prevention. Moreover, we are 100% committed to protecting our clients’ businesses. We can assist you in proactively setting up protections against occupational fraud for your business and help you to identify any potential risks or issues your business or organisation may have. This allows you to have the peace of mind to concentrate on developing other aspects of your business, while knowing you have the support you need from experts who care.
At GW&Co, we pride ourselves on our open-door policy, so please don’t hesitate to pop in if you have a question or would like to know more about how to prevent occupational fraud for your business. Alternatively, you can contact us using our form, here.
