Employee Fraud….Cash is King in Atlanta

A study done by the Association of Certified Fraud Examiners titled the 2008 Report to the Nation on Occupational Fraud and Abuse reported that companies with less than 100 workers are “the most vulnerable to fraud and abuse” by employees. Employee fraud is rampant and the number one fraud scheme is embezzlement. This also applies to businesses in Atlanta.

More than 80% of all employee fraud investigations involve some type of embezzlement.  Embezzlement is defined as an employee taking company assets.  What is targeted over 90% of the time? COLD HARD CASH!

The theft of cash is considered direct fraud.  This type of employee fraud is called a cash theft scheme.  Direct fraud means the employee has stolen cash, tools or other assets.  This can also include falsifying purchase orders or invoices and pocketing company funds. This is commonly called fraudulent disbursement of cash.

Indirect fraud can include an employee taking payments from vendors or customers to allow for some sort of advantage, such as lower sales prices.

Many types of fraud schemes can continue for years without detection and cost small businesses millions of dollars.  Unfortunately the report also showed that occupational frauds are much more likely to be detected by a tip from an employee or insider than by audits or any other controls. This is most likely because many companies do not put enough emphasis on auditing as a prevention tool.

If you feel your company or small business is threatened by employee fraud, contact us at employee fraud call 770.426.0547.

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