Rosanne Walters’ forensic-accounting career started in 1989 in Los Angeles. Today, the partner at BDO Canada LLP’s Vancouver office uncovers fraud in areas as varied as commercial disputes, divorce trials and criminal investigations. Here are her fraud-fighting tips.
Know your employees and their backgrounds. Resumés often contain false information. Thoroughly screen prospective employees, including criminal checks. Gaps in employment should be investigated.
To avoid cybercrime, invest in solid anti-virus programs, firewalls and regularly updated passwords. Information can be easily removed from office computers via memory sticks or email. Be aware of information stored on hard drives of photocopiers and cash registers and purge regularly or save it offsite.
Start a confidential reporting system for employees. According to the Association of Certified Fraud Examiners, 42 per cent of fraud is detected by tips from employees, customers and suppliers.
Protect against fraudulent third parties including property managers, contractors, suppliers and consultants. Ensure they’re reputable and legitimate. Get bids for services as often as possible.
Be aware of corruption schemes involving bribes or kickbacks and relationships between third parties and insiders, such as where a company pays for the services of a consultant who overcharges and later splits the difference with an inside employee.
Scrutinize bank statements. Embezzlement schemes happen when insiders have access to bank accounts or cheques. The danger? They could pay personal bills using company funds. Review your statements diligently to confirm that your accounts haven’t been tampered with.
Examine expense reports since expense-account fraud is very common in all businesses. Original receipts should be supplied. Watch for employees submitting personal expenses or even multiple invoices for the same expense.
Know what assets you’re buying and how they’re being used. Install video cameras where possible.
Read “Is Your Business at Risk of Fraud” from Douglas magazine.