What Business Owners Should Know About Frauds?
Business owners and even the smallest family company should be aware that they can be vulnerable to scams and frauds. In this case, the illegal activities should be kept at bay. It is important to prevent fraudsters from infiltrating the company. Frauds can happen when targeted individuals feel safe by leaving their fund and assets in the hand of wolves under the sheep’s clothing. Frauds can be a sickening thought, because it involves trusted individuals who wreak havoc on many people. Some fraudsters are so experienced that they can repeatedly steal something from various bank accounts. In some cases, even if the financial institutions are not negligent or being complacent, fraudsters still have more than enough capability to break into their systems. This could financially harm many average persons and they money could be stolen.
Frauds can also be performed by internal senior managers who have the ability to significantly override the system. They may already be familiar with loopholes that they can exploit. Familiarity with the system can allow them to do bad things to the system. In this case, it is often down to people and not down to systems. This is something that we need to consider as we explore further to the whole system to find possible vulnerabilities. It is important for business owners to fraud-proof the organization. They can read past fraud cases and evaluate whether the same thing can happen to their company, if someone decides to perform the same kind of attack. After implementing improvements, companies should test their level of vulnerability. It should allow them to assess whether they are truly resistant to any kind of fraudulent attempt.
It is important for us to understand likely signs and we should assess whether we are open to frauds. It is important to have a good system for control. It means that we should know whether existing senior managers are able override the control to modify reports and transaction journals for their financial advantages. This is something that needs to be corrected whenever possible. We should ensure that we have the proper password protection. The problem is, some personnel could also know about the passwords and the secret passwords. Auditing can also be performed, but we should make sure that we know what happens to all the related facts. This should allow us to prevent any kind of fraud that could happen in the future. Businesses may also limit the incidence of fraud by having clear processes and guidelines. Problems can get magically remedied by proper processes.
Today, many companies are spending top dollars for hiring accounting firms. However, it is possible that they overlook the real cause of the problem. This could be caused by machine, person or the entire system. It is important for the company to implement the proper anti-fraud mechanism into their system. In this case, it would be much easier for everyone to determine specific things that may happen. As an example, it would be easy to know where have all the assets and money gone.