• Home
  • Get A Quote
  • Customer Service
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
 
CALL US AT 352.332.0180
Home
  • Home
  • Get A Quote
  • Customer Service
  • What We Offer
    • Auto Insurance
    • Business Insurance
    • Commercial Auto Insurance
    • Contractors Insurance
    • Home Insurance
    • Renters Insurance
    • Boat | Motorcycle | RV
  • Blog
  • Resources
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About Us
    • Location Map
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Auto Insurance PERSONAL AUTO
Auto Insurance COMMERCIAL AUTO
Homeowners Insurance HOME
Business Insurance BUSINESS
Toy Insurance TOYS
Contractors Insurance CONTRACTORS
Home > Blog > Tips for Thwarting Employee Fraud
MONDAY, JANUARY 7, 2019

Tips for Thwarting Employee Fraud

Tips for Thwarting Employee Fraud

Most business managers and owners are well aware of the threat of loss from outsiders, and they will install alarms, hire security guards and take other preventative measures.  

But, most employers pay less attention to reducing the risk of theft by an insider. No one wants to believe that an employee will purposely defraud the company of money.

Most people want to trust their employees, and rightly so. But it only takes one bad apple to do significant damage. 

Depending on the person's position within the company, and the length of time the theft continues, substantial losses can result. 

Business owners often have a tendency to believe that it can't happen to them. Unfortunately, employee fraud is quite common.  Furthermore, no risk reduction measures can be guaranteed to keep it from ever happening or to detect every instance of fraud or theft.

What you can do

  • Institute an anti-fraud policy - Many employers wrongly assume they don't need to discuss insider theft, since their employees know it is wrong. 
    But experts say a strong, written anti-fraud policy, published in the employee handbook and/or posted on employee bulletin boards, helps prevent insider theft.
    The written policy reinforces the employer's intent to maintain an honest, ethical environment, as opposed to one where it is regarded as common practice to steal from the business.
  • Ask employees to report suspected fraud - Honest employees will usually report fraud when there is a good policy for doing so. Provide guidelines and have a system in place for reporting fraud. Explain to your staff how they can report any suspicion of fraud or theft. Take all tips seriously and investigate them.
  • Maintain a business climate of loyalty and trust - Expectations influence behavior. When you expect employees to steal, some are more likely to do so, reasoning that there is no point in behaving honestly if you are already suspected of being dishonest. 

Maintaining an atmosphere in which employees feel trusted and valued, and are rewarded for loyalty, helps prevent insider theft.

  • Encourage ethical business practices - The typical employee thief is often a first-time offender who rationalizes their behavior to avoid having to face up to their criminality.
    Employees who have a weak moral character are more likely to act on it in an environment where they see the business engaging in unethical practices. When the company promotes and rewards ethical business practices, the risk of insider theft goes down.
  • Compartmentalize job functions - When the same person both approves and pays invoices, it is especially easy for a dishonest employee to submit bogus invoices and then pay them.  Compartmentalizing duties helps to prevent this type of scheme.
  • Accountants should look for red flags - Among the methods accountants often recommend are accounting controls, frequent audits, and reconciliation of records. Make sure that accountants understand that you view the discovery of insider theft as an aspect of their duties and services. 

 

The takeaway

To reduce the risk of insider theft, the employer's position should be one of trusting employees in general not to steal, while at the same time being proactive about measures to help keep workers honest. 

Most employees will never engage in schemes to defraud, but unfortunately, there are always some who will. The dishonest employees are often the very people the employer would be least likely to suspect.

Thank you for visiting the Partners Insurance Agency blog. We hope you found our content helpful and informative.


Posted 3:00 PM

Tags: business insurance, employee fraud
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016

  • insurance(99)
  • homeowners insurance(44)
  • auto insurance(40)
  • business insurance(29)
  • home insurance(11)
  • boat insurance(8)
  • workers compensation(8)
  • insurance claims(8)
  • liability insurance(7)
  • flood insurance(6)
  • liability(5)
  • additional insured(5)
  • commercial liability insurance(4)
  • d&o insurance(4)
  • umbrella insurance(4)
  • hurricane preparedness(4)
  • commercial auto insurance(4)
  • renters insurance(4)
  • insurance discounts(4)
  • teen drivers(3)
  • vacation rental insurance(3)
  • business owners policy(3)
  • tria(3)
  • small business insurance(3)
  • insurance coverage(3)
  • water damage(3)
  • summer safety(3)
  • workplace safety(3)
  • commercial insurance(3)
  • commerical insurance(3)
  • covid-19(3)
  • uber(2)
  • non-owned auto insurance(2)
  • drunk driving(2)
  • employee fraud(2)
  • terrorism risk insurance(2)
  • business owners insurance(2)
  • insurance liability(2)
  • freezing pipes(2)
  • halloween safety(2)
  • auto accident scams(2)
  • holiday safety(2)
  • natural disasters(2)
  • contractors(2)
  • moving(2)
  • dog liability insurance(2)
  • forced-placed insurance(2)
  • claims process(2)
  • buisiness insurance(2)
  • general liability(2)

View Mobile Version
Facebook
Twitter
LinkedIn
Carriers
logo, company name
text, logo
Carriers
logo
icon
logo, company name
PIA

Resources

Home About Us Get a Quote Customer Service Contact Us
a drawing of a face

Contact Us

icon
  • 4040 W Newberry Road Suite 950
  • Gainesville, FL 32607
  • Office: 352.332.0180
  • Fax: 352.378.5820
© Copyright. All rights reserved.
Powered by Insurance Website Builder