The median loss from a single case of
employee fraud is $150,000. (Association
of Certified Fraud Examiners)
An Ounce of Prevention:
Safeguarding Your
Business Against Fraud
When it comes to the security of your company, an employee
can be your greatest asset or your biggest risk. Employee fraud
is a constant concern for business owners, but few know how to
prevent it. Stop worrying and start planning! Design your own
fraud prevention blueprint with these simple guidelines.
Many companies rely on insurance to restore the financial losses caused
by employee theft, but you don’t have to wait for misfortune to happen.
Jump in today and tackle these key areas to create your own fraud
prevention plan.
Secure Your Systems
Î Î
Update security software and
operating systems regularly.
Î Î
Install encryption software on
computers and mobile devices
to protect personnel files,
financial data, and product
information.
Î Î
Invest in computer monitoring soft-
ware that will alert you to suspi-
cious activities by employees, such
as transferring large files via email.
THREE FACES OF FRAUD
Î Î
The most common type of fraud, ASSET
MISAPPROPRIATION, involves employees
who abuse their positions to steal from
a business. Outright theft of money and
inventory, billing and payroll schemes,
check tampering, embezzlement, and theft
of company data are all examples of asset
misappropriation.
Î Î
Less common but more costly is fraud by
BRIBERY, which entails a company insider
gaining undue advantage in business
matters. Examples include vendor kick-
backs, conflicts of interest, extortion, and
theft of proprietary information.
Î Î
Although uncommon, FINANCIAL
STATEMENT FRAUD accounts for the
greatest losses for businesses. Some-
times referred to as “cooking the books,”
this type of deceit involves the misrepre-
sentation of revenue, expenses, assets,
liabilities, and reserves.
Î Î
Change passwords and require
employees to change theirs twice
a year.
Clarify Processes
Î Î
Separate areas of responsibility
that could present a conflict of
interest, like accounts payable
and accounts receivable.
Î Î
Perform weekly sales audits
and periodic surprise audits of
accounts and inventories.
Î Î
Use purchase orders and verify
all incoming orders.
Î Î
Use online banking to reconcile
your account daily and consider
using a transaction verification
service through your financial
institution.
Manage Employees
Î Î
Pre-screen candidates by Î Î
Keep an open-door policy and
Î Î
Have staff sign off on under- Î Î
Know your employees and
running background and
criminal checks.
standing both your code of
conduct and your strict policy
against unethical behavior.
install an anonymous tip line
to report suspected fraud.
watch for new behaviors, like
working late, “losing” files, and
being secretive.
Contact your relationship manager today at 855.274.2800 to identify
vulnerabilities in your business and ways of reducing fraud, including Sterling
National Bank’s own transaction verification service Positive Pay.
RANKED BY FORBES’ 2017 “AMERICA’S 100 BEST BANKS” // CONNECT TECHNOLOGY FALL 2017 // SNB.COM | 7