Employee Fraud – The How-to-Avoid Problems Guide

Fiona Hotston Moore, Partner at Ensors Chartered Accountants

Employers are often a victim of employee theft. With one in four owner-managed businesses admitting to being a victim, it’s key to your success that you act to avoid fraud from your staff. This could include fraudulent employment references, dishonest expense claims, thefts from the petty cash or bank accounts, bogus supplier accounts, supplier bribes, theft of stock or manipulation of reported accounts to support commissions or bonuses.

Here are Ensors Chartered Accountants tips to avoid being a victim.

Tip Number One

Employee fraud tends to start in a small way before they become braver and take bigger risks at your expense. Look out for discrepancies – if something doesn’t look right, it probably isn’t. Engage a lawyer and a forensic accountant to check your hunch.

Tip Number Two

The most typical profile of an employee fraudster is often your most trusted, hardworking employee who has been with you for four or five years. Don’t hesitate to investigate if you’re concerned, by putting it off, your losses could get larger.

Tip Number Three

Build internal controls and checks into your business.  Monitor the business cash flow, and request your accountant perform regular internal audit checks on the payroll, expense claims, purchase ledger and stock records.

Tip Number Four

Look out for the employee who suddenly starts driving a very smart new car, takes another unexpected holiday or boasts about a new purchase. Listen to other staff they may have noticed more than you have.

Tip Number Five

Employee fraud is rarely complex or original, Ensors Forensic accountants’department

Fiona Hotston Moore is a partner at Ensors Chartered Accountants


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