Dealing With Fraud When I’m Wearing ‘Rose Colored Glasses’

One of the hardest things I’ve encountered in my career as a Business Financial Adviser and CPA is encountering fraud in a company.  

By my nature, I am altruistic, trusting, and honest.  

I presume, and expect, others to be like minded.  

In my mind, my thoughts are “Why would they lie?  I wouldn’t lie, so why would they?”  Of course, people are, well, human.  They have things going on, and we don’t always know the whole story, or the background, or the stressors.

And so, yes, they do lie.  And if they are in some sort of a jam, generally financial, but not always, and they see an opportunity in a business where they think they can help themselves and take advantage of a company, they will.  

It’s always heartbreaking to me.  The companies I have worked with over the years genuinely care about their employees, and oftentimes will help them out of their situation given the chance.

As an executive, it is your role to ‘trust but verify’ in your organization.  And to ensure you are removing the tempting opportunities for employees to steal from you/your company.

At the very least, address the ‘low hanging fruits’ of fraud opportunity:  

• Do not keep cash out on the counter
• Do not allow the person writing checks to be the person signing them, and certainly not the person reconciling the bank account
• Keep your physical assets locked up and under the control of two people who can check the items out to staff and check them in when use is finished
• Minimize surprises by reviewing your financials each month – let the staff know you are paying attention
• Keep your eyes open – are there those who are living beyond their means?  How are they able to do this?
• Keep in touch with the pulse of the staff – are there those who are having personal issues
• Ensure everyone is taking vacation of at least a week at least once a year

These are some basic precautions you can easily implement to minimize fraud risk in your organization – you’ll sleep better at night, and you’ll be able to spend your time helping your organization do the good things it was set up to do.