In my last blog I spoke about occupational fraud protection, what it is and some key motivations behind it. In this blog I'll look at 5 strategies for preventing occupational fraud.

Occupational fraud is a real threat to Canadian businesses, unfortunately more than half of small businesses and mid-sizes enterprises that are vulnerable to occupational fraud do not believe they're at risk, yet 1 in 4 businesses experienced incidents of occupational fraud in the past fiscal year. That's a real threat and a risk you have to prepare for.

“$3.2 billion is lost to Canadian businesses annually from occupational fraud alone.” – CGA Canada

More than 50 types of deception are associated with occupational fraud, making protecting your business from this type of threat a daunting task.  Therefore understanding occupational fraud and its motivators, as we described in our last blog, is the first step in protecting your business.

Once you have a clear understanding of this type of fraud, you can implement these 5 preventative strategies that will significantly help reduce your risk:

1. Asses Your Risk of Fraud.  The first step in protecting your business from occupational fraud is assessing your risk and implementing a plan to respond to fraud.  This step is the first and most important, as it will give you the basis for protecting your business from criminals.

The majority of businesses are not prepared to respond to fraud as they have not assessed their risk and put a plan in place.  Your plan should include preventative strategies, protocols for hiring and retaining employees, employee training and education, as well as disciplinary actions if fraud is discovered. 

2. Limit Access to Authorized Employees.  A good quality office security system is always important. You can protect your intellectual data by ensuring only authorized employees have managed access to confidential information.   In the event that information is leaked, you will be able to target your investigation to include only those who had access to the information.  

Managed access control, or keyless entry, is one of the easiest, most cost-effective ways for you to increase security. An access management system is also vastly more effective if it's integrated with an intrusion detection system so different employees can have different access levels. 

For example, employees who're authorized to open the facility will be allowed access and will be able to disarm the security system.  Employees who are not authorized to open the facility will not be allowed access to the facility when the security system is armed.

Also when the system is hooked up to a CCTV system and a central monitoring system this means a simple phone call can make instant changes to the access system, at any time, like adding employees, deleting employees, changing access levels and door locking/unlocking shifts.

To be truly effective this system needs electronic locks, badges, or cards and readers that will give you a lot of control over the security of the entire system, eliminating the expense of re-keying or changing locks when an employee leaves.

Access control is essential and immediately decreases your liability and risk.

3. Implement Internal Controls.  There are many internal controls that you can implement to help prevent occupational fraud.  Fraud often occurs when there are opportunities such as working in isolation, or a lack of regular assessments, so implementing a set of internal controls can have a huge impact.  Consider implementing the following controls:

• Ensure that one person does not have control over an entire financial transaction.  This creates a balanced system where a secondary employee notices financial errors or fraudulent activities quickly. 
• Implement a reporting system so employees can inform you of possible fraud anonymously.  
• Require all employees to use their vacation time. An employee who does not take vacation may be concerned that their fraudulent activity will be noticed.  This is especially important in the accounting department.
• Create a policy that ensures employee credit cards are not used for any personal spending and also and verify all charges.
• Create a policy that includes use of business assets, such as vehicles or cell phones.  This can include examining the use of assets, such as reviewing cell phone bills or vehicle logs, on a regular basis to ensure assets are being used for business purposes only.
  
  

4. Regularly Monitor Your Facility.  One of the major motivators for fraudulent activities is working in isolation.  If you are unable to reduce opportunities for isolation, consider implementing a quality CCTV surveillance system that is monitored 24/7. Employees will know they are being watched and recorded, so also make sure there are no blind spots in sensitive areas. This will deter fraudulent behaviour while employees are present, while also protecting your business after the office is closed. 

5. Get to Know Your Employees.  Building positive relationships with your employees can help prevent occupational fraud.  Not only will you build a relationship of trust, you will be able to identify motivating factors such as financial problems or personal problems by noticing changes in attitude.  Strong relationships can also contribute to a positive work environment, also helping reduce the risk of occupational fraud.

While these 5 strategies are a great step forward in protecting your business from occupational fraud, a more comprehensive review and assessment of your business will effectively protect you from a variety of risks, both internal and external.  

Contact us today - We can help reduce your business risk with a free security assessment:

About Sonitrol Western Canada:

We're so confident in our technology and responsive service, that no one else in the industry can match our guarantee.  Our unique verified audio and CCTV video business security solutions enable our operators to hear and see what is happening in your business before the criminals gain entry!!  We verify the actual source of the alarm, and we get the police to attend the scene immediately.  FOR A FREE SECURITY AUDIT, click here, or call 1-866-766-4876 - We are a security company with over 150 offices across North America serving clients across Western Canada in British Columbia, Alberta, Saskatchewan, Victoria, Vancouver , Edmonton, Calgary, Saskatoon.

Sonitrol Western Canada, with its Verified Electronic Security Systems, is committed to providing customers with the most comprehensive security protection.  Cooperation in the elimination of false alarms is not only beneficial to the system’s user, but results in better protection of the entire community by allowing law enforcement to use their resources as efficiently as possible.