According to the recent 2016 Report to the Nation by the Association of Certified Fraud Examiners (ACFE), the median loss in cases were the fraud was committed by owners/executives was $703,000. In a recent article, a former MillerCoors marketing executive pled guilty to helping steal more than $8.6 million by billing for events and promotions that never took place or at inflated rates.
What can your business do differently to help avoid these cases of high ranking executive or employee fraud?
- Vendor checks. Know who your vendors are before doing business with them.
- Segregation of duties. Keep the duties of entering vendors separate from entering invoices.
- Review invoices. Implement procedures for reviewing and approving invoices.
- Checks and balances. Even executives should have checks and balances.
- Surprise Audits. Perform surprise audits.
- Tone at the Top. Implement policy and procedures that everyone follows, starting at the top.
Executives have a lot of power and sometimes that power leads to trouble. If no one is watching them, they can do a lot of damage. For more information on preventing fraud in your organization, contact Mike Rosten, CPA, CFE.