Our experience shows there is an increased risk of fraudulent activities within private businesses where people hold multiple roles or differing responsibilities, with most internal embezzlement involving someone from within the accounting department. Warning signs of fraud related situations can therefore be that much more difficult to detect within private companies, especially where prevention procedures and policies might not be as rigorously established as within larger organizations. This can lead to a prolonged period of time before a fraudulent event within a company is discovered, on average up to 18 months.
The intent to commit fraud usually derives from an incentive or a personal need. Then, an opportunity to commit fraud needs to be present in order for the act to be undertaken. This can be exemplified sometimes when an employee holds the dual responsibility of bookkeeping and purchasing for example. Finally, fraudulent employees can rationalize and perpetuate their actions by the way they are treated in the workplace, whether those reasons are founded or not.
Continue reading…