5 Myths About Fraud
From my Wisconsin Law Journal article 5 Myths About Fraud:
The following are five of the fraud myths that I regularly run into in my fraud investigation practice. Whether owners and executives actually utter these out loud or not, merely buying into these myths mentally can be a recipe for disaster.
1. Our company does not have an internal fraud problem.
While companies would like to believe they have good employees and adequate controls to prevent fraud, the fact of the matter is that 45 percent of companies will be significantly affected by fraud, according to one international study. A separate study estimates that the average internal fraud will cost $159,000, and that almost one-fourth of fraud cases will cost companies over $1 million each.
Companies cannot afford to ignore the risk of fraud and the likelihood that fraud is occurring internally. It is too expensive, particularly when one considers the fact that there are many indirect costs of fraud, including investigation and legal costs, employee attrition, and decreased employee morale.
Actively fighting fraud means implementing policies and procedures that prevent and detect fraud. Anti-fraud professionals who are experienced with the common methods of fraud can be invaluable to this process. Whether a company gets there with employees or outside consultants, it is important to secure company information and assets to prevent internal fraud.
