The extensive report from the AFCE covers all type of fraud, whether they are financial, or otherwise. The three main categories it is broken down into are Corruption, Asset Misappropriation, and Fraudulent Statements. Corruption schemes entail bribery, conflicts of interest, illegal gratuities, and economic extortion. Asset Misappropriation schemes (most common) cover cash manipulation, inventory theft, and fraudulent disbursements.
For those businesses, who can't afford hired help to deal with fraud, I guess this means an owner should check their books and accounts randomly without letting their employees know when they are going to do it. They should also diversify controls and oversight (separate key duties). No one person should have complete control over a revenue stream or valuable asset. Additionally, there are third-party anonymous hot line services and if they are too expensive, a creative small business owner might set up a telephone line with a voice mail and have some posters made.
So far as training management and employees on what to be aware of — the current AFCE report is a wealth of information also. A little awareness and knowledge of how fraud is facilitated can go a long way towards preventing it, as well as giving your human resources the knowledge to spot and report it.
Most fraud is defeated by people who are knowledgeable of what to look for. This is because fraud schemes rely on tricking everyone else to think nothing is going on.
On a final note, if you are a small business owner and detect fraud, I recommend leaving any legal recourse matters to someone who is familiar with how to do it. Handling these matters the wrong way can add to the problem by causing other losses, such as civil litigation or protecting yourself against it. In any situation where a crime is detected, the best thing to do is to contact the authorities and seek their assistance with it.
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