Beware of Fraud
Karen Blanchard, CA and John Wright, CA, CMC advise clients to be vigilant about following up on red flags that can be telltale signs of major fraud.
Karen Blanchard, CA and John Wright, CA, CMC
Over the past year we have become aware of more instances of fraud than we had in the previous five years combined.
What we've seen and, what studies have confirmed, is that major fraud is often committed by a senior, trusted individual who has worked in an organization for a long time.
Fraud can go undetected for many years, especially if red flags are ignored. We thought it would be prudent to remind clients to be vigilant and to look into suspicious circumstances whenever they occur.
So what are some situations that might arouse your suspicions?
• Can you think of someone who is reluctant to change their position even when offered a promotion?
• Is there someone who is surrounded by people who never challenge them?
• Does that person respond negatively when they are challenged?
• Is there excessive secrecy in a department and reluctance to provide information when requested?
• Does someone have a "less than cordial" relationship with auditors or outside accountants?
• Does that person seemed overly stressed for no apparent reason?
• Do they have the opportunity to manipulate payroll, expenses, banking transactions or other financial information?
What we recommend is that you be vigilant, ask questions and don't be intimidated. Shake things up. Be assertive when reassigning work, reviewing procedures and asking for information.
Review your internal controls to ensure they are working. Obtain outside help if you need it. Don't think fraud can't happen to you, because it can happen to anyone.