‘Tis the season for fraud. Unfortunately.
Last year, Canadian businesses lost an average of $140,000 due to workplace fraud during the festive end-of-year holidays.
A typical business or organization loses 5-per cent of its revenue every year as a result of employee fraud.
Sandy Boucher, Senior Manager with Grant Thornton’s Forensic Accounting Team, says fraud increases by about 20-per cent in December. He cites Christmas as an expensive undertaking and suggests it’s a time when employees may be in need of extra cash.
However, Boucher says something to keep in mind is that scams often last an average of 18 months before they are detected. He says one of the key ways to stop a scheme is awareness.
“We know that the most effective and the cheapest way is to have a whistle blowers hotline, there’s a good chance that somebody in your office knows that something is wrong, or something is going on, and they may have more or less detail,” he told 660 NEWS.
Boucher added everyone must ensure there is a separation of duties in the office so one person is not in control of the entire financial process.
His forensic accounting team is often called in to investigate. He says his best prevention tip is to look for signs something isn’t right in the office.
“The most common one is people living beyond their means,” he said. “Surprisingly, although it sounds silly, you know, I’ve actually worked on frauds where people said, ‘yea, I always wondered how they kept affording those holidays,’ or ‘I always wondered why so-and-so parked next to the boss with a car that was way fancier than his.”
Boucher noted other red flags include covert behaviour, unusual associations with customers and vendors, or a lack of controls, checks and balances that should be in place.