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CG Team Blog

Stephen Reed, CPA, PSA, CGMA

Recent Posts

Fraud Prevention Strategy Series - Proactive Measures

Posted by Stephen Reed, CPA, PSA, CGMA

Apr 12, 2016 10:00:00 AM

Take proactive measures to prevent and detect fraud in your company. Consider installing and monitoring security cameras in and around the outside of your business. If you provide company vehicles to employees, consider installing a vehicle tracking system to monitor the location of each vehicle. Compare the service calls or delivery stops made during the day to the vehicle tracking printout at the end the day. Question any suspicious stops that were not part of that day's route. Have the tracking system send you an e-mail alert if the vehicle strays outside of its designated territory.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Financial Information

Posted by Stephen Reed, CPA, PSA, CGMA

Apr 5, 2016 10:00:00 AM

An important tool to help detect and prevent fraud in your company is to take a look at your financial information. Compare the current year information against information from prior years to determine if there are any anomalies. Has your Gross Profit Margin decreased? If so, take a good look into your Cost of Goods Sold. Do the expenses make sense to you? If not, maybe an employee is stealing merchandise or maybe they are in collusion with a vendor to inflate the cost of your materials and supplies.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Vacation Time

Posted by Stephen Reed, CPA, PSA, CGMA

Mar 29, 2016 10:00:00 AM

One way to help prevent fraud from taking place in your company is to require employees to use their vacation/personal time off. First of all, they've earned it and should take the time off. More importantly, an employee who hasn't missed a day of work in years may be in indication far beyond someone just being considered a loyal and dedicated employee. It may indicate that the employee is hiding something and is afraid that it may be found out if they were not there to protect or cover up their activities.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Sequence

Posted by Stephen Reed, CPA, PSA, CGMA

Mar 22, 2016 10:00:00 AM

Another way to help prevent fraud from taking place in your company is to make sure that all checks, purchase orders and invoices are numbered sequentially. Question any that are out of sequence. Make sure all checks that are received are immediately stamped "For Deposit Only" on the endorsement line. Require two signatures on checks that are above a specified dollar amount. Avoid using a signature stamp to sign checks (why make it easier for your employees to commit fraud?).

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Raise Employee Awareness

Posted by Stephen Reed, CPA, PSA, CGMA

Mar 15, 2016 10:00:00 AM

Another way to help prevent fraud from taking place in your company is to raise your employees' awareness. You should develop a Fraud Risk Policy and communicate the policy to all employees.  Establish clear and concise consequences for those who violate the policy and (this is the most important part) follow through with the consequences. Those employees who were contemplating committing fraud will now know that you are serious about enforcing your Fraud Risk Policy and will perhaps think twice before attempting to commit fraud.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Disgruntled Employees

Posted by Stephen Reed, CPA, PSA, CGMA

Mar 8, 2016 10:00:00 AM

Employees who are defensive and appear to be disgruntled and/or disengaged can be another potential red flag that fraudulent employee activities may be taking place in your company. Perhaps they were passed over for a promotion or thought they deserved a bigger raise. They may be committing fraud as a way of getting revenge and their defensive attitudes may indicate a sign of guilt.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Personal Problems

Posted by Stephen Reed, CPA, PSA, CGMA

Mar 1, 2016 10:00:00 AM

Another potential red flag that can uncover employee fraud is an employee who is having personal problems. Does your employee or one of their family members have severe health issues? Are they caring for sick and/or elderly parents?  While this doesn't immediately point to fraud, any one of these items could create a financial hardship which could cause an otherwise honest and loyal employee to consider committing fraud.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Sharing Duties

Posted by Stephen Reed, CPA, PSA, CGMA

Feb 23, 2016 10:00:00 AM

Do you have employees who are resistant to cross-training or sharing duties? This could be a potential red flag for employee fraud. From a business continuity and internal control stand point, office personnel should be cross trained and be able to share duties. Employees who resist this may be more than just control freaks, they may not want someone to uncover what they have been up to.

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Employees Living Beyond Their Means

Posted by Stephen Reed, CPA, PSA, CGMA

Feb 16, 2016 10:00:00 AM

Another potential red flag that fraudulent employee activities may be taking place in your company is to be on the lookout for employees who appear to be living beyond their means. Since you know the salaries that you are paying your employees, be on the lookout for the following items; employees taking extravagant vacations, buying very expensive automobiles, wearing expensive and excessive jewelry, paying for elaborate weddings for their children. Any one of these do not necessarily mean fraud is occurring, but it should cause you to ask yourself, does the life style they are living make sense based on what you know about your employees?

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Topics: Employee Fraud Prevention

Fraud Prevention Strategy Series - Employee Behavior

Posted by Stephen Reed, CPA, PSA, CGMA

Feb 9, 2016 10:00:00 AM

Employee behavior may be a red flag that fraudulent activities may be taking place in your company. Observing, listening and getting to know your employees can help you identify potential fraud risk. If an employee is having financial troubles, it may tempt them to do something they otherwise would never consider. Some signs to be on the lookout for:

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Topics: Employee Fraud Prevention