Because employees are on the frontline to observe suspicious acts by their fellow staff members, employee anti-fraud education is the cornerstone of an effective fraud prevention program. Without training about how fraud hurts the organization and it’s staff, what constitutes fraud, how to identify the red flags of fraud, how to report any suspected wrongdoing, and the consequences of fraudulent actions, many employees might miss; or even willingly turn a blind eye to the warning signs of theft and misconduct. To be most effective, such training should be based on the realities of the organization, rather than on generic anti-fraud messagesthat provide no real applicable value, and should be ongoing with refresher training held at least annually. Additionally, while employees at all levels should be required to participate in the anti-fraud training program, managers and executives should be provided with supplemental training that addresses the added fraud prevention and detection responsibility provided by their positions of authority.
First of all, a Fraud Risk Checkup for your business is mandatory. You go to the doctor for checkups don’t you? Then why are you neglecting to have your business checked for it’s risk of fraud? Second, Anti-Fraud Education should be instilled in every employee who works for the company. Knowing how to identify the red flags of fraud before the fraud occurs can drastically lower your fraud risk. And thirdly, have a system to anonymously report fraud for your employees, vendors and customers. There are plenty of third parties that offer this service, and Fraud Investigative Services, LLC offers a low-cost option of making this service available to your organization.
Ever heard the phrase, “knowledge is power?” In most cases, having more knowledge enables us, as human beings, to deal more effectively with situations. That said, I wanted to talk about something that is becoming increasingly important in the fight against employee fraud. Anti-fraud education, or what we at Fraud Investigative Services call it, Fraud Prevention Training. This is a comprehensive, 8 lesson course that teaches the fundamentals of how small businesses are victimized by employee fraud and how they can protect themselves from it. The two major reasons that small businesses are especially vulnerable to employee fraud, are: 1) Organizations with few employees often lack basic accouting controls, and 2) There is a high level of trust that exists in small organizations, therefore, employees and management tend to be less alert to the possibility that fraud may be occurring. Fraud Prevention Training can go a long ways towards increasing the odds that employee fraud will be discovered early on, as employees will be more vigilant and aware of the red flags of fraud.