Ask the Expert: Avoiding fraud
Nick Johnson, commercial litigation partner at Glaisyers Solicitors, provides his expertise on how best to avoid falling victim to fraud.
All answers are for general guidance only. Each case must be handled on the individual facts.
Q: How do I give my business the best chance for avoiding fraud?
1. Always identify areas or risk. It's important that in looking at your business you carry out a risk assessment of areas which could give rise to acts of dishonesty. In particular where employees are dealing with money or are responsible for negotiating or implementing contracts.
2. Put in place systems which allow you to monitor those areas which are subject to risk. The systems that are required will vary according to the type of business. However a careful analysis of financial information is important.
3. Having put systems in place they should be monitored regularly and comparisons made.
4. In addition to regular and periodic checks you should also carry out random inspections. If necessary carry out inspections of people’s procedures while on holiday and compare certain key features with results produced while at work.
5. Create a culture whereby there is an openness and transparency in the way people undertake their work which allows for regular inspection and checks which are not considered to be a threat to your employees' position.
6. Create an environment and a culture whereby you are not reliant upon one particular employee to carry out duties which you consider are a high risk for acts of fraud. If this is not capable of being achieved then ensure there are systems in place to carry out more regular periodic checks.
7. Create structures whereby one person does not have control or responsibility over an area of risk.
8. Avoid creating a culture whereby remuneration is primarily based upon performance. This encourages people to cut corners.
9. Compare an employee’s lifestyle with the level of remuneration. If this appears not to be consistent then look carefully at the role they play within your organisation and their ability to carry out acts of fraud. As far as you can monitor peoples financial pressure.
Always review and if necessary change checks and procedures where there are areas of risk so as to avoid people implementing systems which allow them to commit a fraud. Changing systems make it difficult for people to implement fraud
Contact details
Nick Johnson
Commercial litigation partner
0161 832 4666
cjj@glaisyers.com
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