Employee Theft, Part 3: Theft Tends To Increase During Tough Times

The Association of Certified Fraud Examiners recently looked at 959 cases of in-house fraud and embezzlement. (Source: businessbrief.com)

    • Small firms tend to be more likely to be hit by in-house larceny during periods of
      an economic downturn.

    • The median loss in this study was $175,000.

    • The typical time frame between the first act of fraud and the time someone was
      caught was two years. In other words, most instances of thefts go undetected for
      long periods.

    • Most thefts were committed by first-time offenders — people who appeared
      squeaky clean prior to getting caught.

    • Most of the perpetrators were not suspected by their employer. They were caught
      as a result of tips from other employees or outsiders as opposed to being caught
      in an audit.

What To Do About It

    1. Look for fraud in the obvious places. Most embezzling is done by the people who
        handle money in your office.

    2. Create checks and balances by cross training. Rotate jobs in your office so that
        one employee isn't responsible for the same area all the time. Banks require
        tellers to take vacations on a regular basis.

    3. Do some type of formal audit or financial review every year. Employees need
        to know that someone will be checking their work at some time in the future.

Has This Happened To You?

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Best Regards,
Jerry Hayes, OD

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Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2010 Jerry Hayes, OD. Not to be reproduced without written permission of the author.