Fraud Investigations for Small Businesses and Big Companies
One of the unfortunate things that could happen to a company is to be subjected to fraudulent schemes and embezzlement by their own employees for the latter’s personal benefits and financial gains. Every year, there is an estimated $600 billion company revenues lost in fraud and embezzlement. There is an increasing occurrence of asset misappropriation in almost every company. Sadly, the likely victims of fraud and embezzlement are small businesses with an approximate yearly loss of $120,000 in comparison to the approximate $90,000 loss of big companies.
Businesses should not be lax in their security against fraud and dishonest employees. Approximately 30% of company losses can be attributed to dishonest or corrupt employees. An average loss of $60,000 is caused by fraudulent rank-and-file employee; while a loss of $250,000 is caused by the fraudulent actions of managers or supervisors. Losses caused with these two kinds of employees conspiring are astounding. Sadly, this could all be happening right under the nose of the employers, but it takes more than a year before they could even be uncovered. This is probably why there is a need to conduct fraud investigation.
The Aspects of Fraud Investigation
Fraud investigation focuses on three aspects – asset misappropriation, corporate corruption and fraudulent reports. Fraud investigators would usually comprise of three persons; domain, technology and fraud specialist. The domain specialist is a person who knows the workings of the industry to be investigated – how the business operates and the process involved in the operation. The technology specialist is a person who possesses knowledge of the technology used by the business; while the fraud specialist is an expert on determining fraudulent activities and identifying these activities.
How They Work
In conducting an investigation, the methods that will be adopted should be customized to the type of company and industry to be investigated. The company should be carefully studied in order to determine what areas of the operation are weak and could be a potential area for fraudulent activities. The study should include evaluation of the conditions that could give rise to fraudulent schemes. By understanding these conditions, the investigators would then be able to determine the signs of probable illegal activities within the company. Nowadays, fraud investigators use computer analysis in order to identify conditions, determine symptoms and investigate operations.
Benefits of Conducting Fraud Investigations
Companies can avoid being embezzled. They can avoid losing thousands of dollars arising from the fraudulent activities of their own employees. Companies should make it a practice to conduct regular investigation as a precautionary measure against fraud and other illegal activities.
Posted in Private Investigations