Did you know that half of U.S. companies uncovered more fraud after the COVID-19 pandemic began than before? So if your business is finally welcoming employees back in person, don’t be surprised if you discover an increased incidence of scams and corruption.
Read on for guidance on how to position your company for a fraud-resistant future.
Assessing new risks as business vulnerability increases
If most of your employees worked from home during the pandemic, managers may have found supervising their activities a challenging task. Even if you kept workers physically on the job, it’s likely been difficult to maintain the usual supervisory levels and anti-fraud procedures in the new world of work.
In either scenario, you may have unknowingly created greater opportunities for dishonest employees to steal. Your employees may have also fallen victim to fraud schemes committed by third parties, such as customers and suppliers — and especially cybercriminals.
Now’s an ideal time to evaluate your internal controls with a fraud risk assessment (FRA). An FRA identifies the potential schemes facing your organization and the processes that can help detect or prevent their occurrence.
For example, let’s say you pivoted from making perfume to producing hand sanitizer during the pandemic. An FRA can look at your vendor vetting and new-hire processes to determine if you require new, more rigorous ones. If you’re now selling products primarily online, an FRA can assist in determining if your cybersecurity protections and payment systems are fit for the job.
Investigating misconduct and building your case
If your FRA reveals a suspicious transaction or an employee makes a fraud allegation, don’t wait to investigate. According to a report by the Association of Certified Fraud Examiners, typical fraud results in a median loss of $8,300 per month — a significant number for the majority of companies.
A thorough fraud investigation requires knowledge of employment law and advanced accounting principles, as well as tremendous attention to detail. A fraud expert — usually a CPA or forensic accountant — can lead the investigation, and establish the appropriate parameters and the type of evidence needed to successfully prosecute. This type of professional can also offer recommendations on how to prevent new fraud incidents through enhanced controls.
Stopping fraudsters in their tracks
A lot has changed in the business world since early 2020. As you navigate novel challenges, don’t forget to keep fraud prevention top of mind. The knowledgeable CPAs at Magone & Company can lend our fraud protection expertise to help your business remain unscathed. Give us a call today at (973) 301-2300.