What Are You Doing for Fraud Prevention Month?

“Every young man would do well to remember that all successful business stands on the foundation of morality.”

– Henry Ward Beecher

This quote seemed like a good way to address the month of March, which is National Fraud Prevention Month. Last year, I wrote the following post encouraging you to be aware of fraud and to seek it out.

As I’m fond of saying, if you haven’t found anyone at your business committing fraud, you’re just not looking hard enough.

If your controller is required to look at only transactions above $5,000, during the month of March encourage him to look at all transactions over $4,000. Think about it. If someone wanted to steal money and knew that all transactions over $5,000 were routinely reviewed, wouldn’t that person steal money in the amount of, oh, say, $4,999?

If you’re saying, “No way!” you better believe that I have uncovered more than one case of fraud on just this basis.

Here’s something else I would like you to do for the month of March: kick your CFO out. No, not permanently (well, hopefully not permanently). Just ask him to leave for 2 weeks. Perhaps right before taxes are due is not the best plan for some businesses, but perhaps his vacation is coming due just after that. If this is too short notice GOOD! You don’t want him to be aware this is coming. You just want him out for two weeks.

Now you do his job. Sit at his desk. Open his mail. Talk to his secretary or assistant. And don’t let him back in the building for any reason. Just see what comes up – trust me.

If you don’t find anything unusual, wonderful. Be glad you did this and move on. But if you do find something, know that you’re not the only one out there who did. This is one of the number one ways I uncover fraud, and I encourage you to do it annually.

So, over the course of this month, I hope you’ll enjoy some of my many stories of fraud, and when I say enjoy I mean I hope they’ll inspire you to put more strict measures in place at your business to prevent fraud.

Remember, if you haven’t found fraud, you’re not looking hard enough.

One thought on “What Are You Doing for Fraud Prevention Month?

  1. Pingback: Fraud Tip: Keep Your Security Room Locked « The Turnaround Authority

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