Find out how you can protect your business from employee fraud.
While a good employee can be your business’s biggest asset, a bad employee can be absolutely devastating to your company. If you are a small business owner, then you should take steps to protect your business from the emotional and financial costs associated with employee fraud. Here’s what you should know about employee fraud.
Types of Fraud
There are three common types of employee fraud: asset misappropriation, corruption, and financial statement fraud.
- Asset Misappropriation– This is the most common type of fraud because any employee at any level of your business can abuse company resources. Common examples of asset misappropriation include stealing company resources, forging checks, and using company resources for personal use.
- Corruption– Corruption occurs when an employee accepts bribes or payoffs in exchange for offering preferential treatment or unauthorized discounts.
- Financial Statement Fraud– Financial statement fraud is committed by the employees who handle the financial records for your company. This type of fraud occurs when employees inflate revenues, exaggerate assets, and conceal expenses.
How to Protect Your Business
There are several things that you can do to protect your business from employee fraud. For starters, you can employ more in-depth screening measures when hiring a new employee. Conduct a thorough background check and try to contact previous employers. Doing a little detective work could uncover previously undisclosed criminal activity or prior involvement with fraud. Another way you can protect your business is by conducting random spot checks of your employees’ work. Conducting a surprise inventory inspection or randomly looking over your company’s books can reveal any wrongdoing on your employees’ parts. Finally, you can deter employees from engaging in fraudulent activities by establishing a code of ethics for your business. Emphasizing fair and legal business standards will make your employees less likely to engage in illegal practices.
Use this information to protect your business from employee fraud. Want another way to keep your business safe? Then make sure it has the right insurance protection in place. To get the right policy to fit your needs, contact the experts as Moser Group Inc. in New York. Our dedicated team is ready to assist you with all your insurance needs.