By Brian E. Ravencraft, CPA, CGMA, Partner at Holbrook & Manter, CPAs
I know it’s hard to believe since most of us wouldn’t even think about stealing from others, but, sadly, fraud and employee fraud continue to be on the rise. It appears that fraud is the “new normal” with thousands of incidents occurring every single day. The fraud methods are becoming more sophisticated and the number of incidences is increasing, so I think the best practices below are a good reminder.
Crucial to limiting any chances of loss are prevention and detection. As a business owner, you should have a plan in place for preventing fraud. It is much easier to implement and follow through with strict policies, than to deal with the aftermath of fraud. These best practices are easy to do and will become a routine practice once you start doing them. These should be implemented by everyone in your organization:
- Monitor your accounts frequently and set up alerts online to identify suspicious activity.
- Make sure your systems are up to date with the latest hardware and software updates. This includes routers, browsers and applications. Often updates will fix bugs that might have allowed a threat into your system.
• Clear your browser cache frequently. This will help protect personal information and help applications run optimally.
• Make sure everyone is vigilant about password safety. Some ways to do this is to use longer passphrases, never re-use and implement a system that prompts the changing of passwords on a routine frequency.
• Everyone should be suspicious of unsolicited emails or emails from a familiar name that seem out of context. Look closer at the email address from the sender. Also, don’t click on links, open attachments or provide personal/business information such as login credentials.
It is important to remember that all threats will not come from inside your organization. Employee theft is also on the rise and one of the biggest threats to your business. The best way to prevent employee theft is to make strict policies include documentation and separation of duties. Also, make those policies widely known to all employees and let them see the follow up so they know management is watching and there will be consequences for any breaches of the policies. Make sure you review your internal controls frequently to make sure they are still effective. Utilize dual controls on payments and ensure separation of duties. Verify your employees’ access rights to all areas of your business frequently.
With smart policies and employee training, you can stay ahead of risks before they develop. Contact me if you need assistance reviewing your policies.
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.HolbrookManter.com.