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The ‘Insider threat.’

Perhaps the one fraud business leaders will not like to consider is that which is conducted by its own employees.

As part of International Fraud Awareness Week, this is my final post about common business frauds.

One in five businesses has been defrauded by an employee. It is the employees’ access to your assets and familiarity with process weaknesses that is your threat. Your employees are a big part of your reputation, so you need them to be honest to protect your good name and revenue.

Threats include employees submitting false travel and subsistence claims; misusing the company credit card and colluding with suppliers to manipulate contracts and falsify invoices.

It’s important not to distrust your staff – but just make sure you really know them.

You can do that by ensuring you have two independent references per new employee. Verify their personal information and background. Be thorough and keep chasing references. Have an anti-fraud policy with the tone ‘set from the top.’ This sets guidelines for preventing, detecting and dealing with fraud in the company.

Do you know how to develop such a policy?

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