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Employee fraud


Employee fraud

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									inadequate controls, such as:                          When making purchases and payments ensure:
- not reviewing claims                                 - expenditure is supported by an original invoice,
                                                         order number details or original delivery docket
- lack of documentation (such as invoices, order
  forms and approvals)                                 - receipt of goods and services is acknowledged
                                                       - payment on the account is made on an original
They might also occur because of favouring               invoice
particular suppliers or through receiving                                                                                                       Your guide to stopping
inducements or kickbacks from suppliers.               - cheques are made payable to the account of the
                                                         supplier, and not to ‘cash’
What can you do?
As an employer, you can take a number of steps to
                                                       - you keep payment records for audit purposes                                       Employee
safeguard your business against fraud which include:
- authorising individuals to make purchases and
  payments                                               Did you know…
                                                        …you can stamp out fraudulent activity by
- issuing guidelines and training on making             regularly carrying out audits!
  purchases and payments
- setting an expenditure limit
- segregating purchasing, receipting and payment       For further information please contact:
  duties                                               Major Fraud Investigation Group
                                                       Queensland Police Service
- monitoring compliance with policies and
                                                       200 Roma Street, Brisbane, Qld 4000
                                                       Phone:             (07) 3364 6622
Documentation                                          Facsimile:         (07) 3364 6549
It’s important to make sure your business has
documentation supporting all transactions
for expenditure and payments.                                             /program/fraud/whatis.shtml
This creates a paper trail for                         Crime Stoppers     1800 333 000
accounting purposes and                                Crime Stoppers TTY 1800 333 000
highlights any
                                                       Emergency only     000

                                                                                Cartoons by Rob Wann
                                                         Produced with the assistance of the Media & Public Relations Branch
                                                           Reproduced from information supplied by the NSW Police Service

                                                              Queensland Police Service
                                                                  Vision Statement
                                                        We are determined to be a professional police service,
                                                         dedicated to excellence and committed to working in
                                                        partnership with the people of Queensland to enhance                   ‘Foiling the fraudsters’
                                                              the safety and security of our community.
What’s Fraud?                                                                                                  What you can do?
Fraud is behaviour that’s deceptive, dishonest,
corrupt or unethical.
                                                        Safeguarding Your                                      Make sure you have good cash storage facilities and
                                                                                                               regularly review your banking procedures.

For a fraud to exist there needs to be an offender, a   Business                                               Staff
victim and an absence of control or safeguards.                                                                It’s important to train staff on cash handling
                                                        The fraudulent activities of employees are a major     procedures and regularly supervise them. You can
Here in Queensland, the laws on fraud involve           cause of loss in the business community. Poor          also
dishonesty in any of these situations:                  business practices and a lack of supervision create    - segregate duties involving cash handling
- obtaining property belonging to someone else          an environment for dishonest employees to use a
                                                        variety of methods to steal from their employers.      - arrange for cashiers to operate their own float and
- applying someone else’s property to one’s own                                                                  balance when undertaking duties
  use                                                   The two main areas of risk are:                        - minimise the use of an open cash register
- causing a detriment to another person or entity       - cash handling procedures
- gaining a benefit or advantage for any person; and    - purchases and accounts payable                       Transactions
                                                                                                               By regularly carrying out audits for cash
- inducing or causing any person to deliver property
                                                                                                               transactions and floats, you can identify any
  to another person                                      Did you know…                                         discrepancies. Steps you can take to do this include:
                                                         … the tell-tale signs of fraudulent activity are
Fraudulent activity in the workplace often results in    usually the obvious ones!                             - monitoring the number and regularity of ‘No Sales’
the loss of revenue and property, while increasing                                                               transactions on cash registers and countersign ‘No
operational costs and service charges. It can also                                                               Sales’ transactions
mean obligations to employees, customers,               Cash Handling Procedures
suppliers or contractors can’t be met.                  Why does it happen?                                    - reviewing petty cash transactions and claims
                                                        The main risks involved in cash handling procedures    - retaining all receipts for audit purposes
The knock-on effect for businesses may:                 include:
- damage credibility                                    - theft
                                                                                                               Purchases and Accounts Payable
                                                        - misuse of petty cash                                 Why does it happen?
- compromise confidentiality
                                                        - submitting fraudulent claims                         The purchasing and supply of goods for business
- result in public criticism
                                                                                                               purposes is an area open to wasted expenditure
                                                        Poor cash handling and reconciliation practices are    because of
Common frauds include using false
                                                        the main causes of this type of fraud.                 - corrupt practices
- identities
                                                        Keeping large amounts of cash on the premises and      - kickbacks
- cheques
                                                        not securing them or banking them promptly also        - false claims
- credit and EFTPOS cards                               creates opportunities for theft.
                                                                                                               - bogus vendors
Fraud Risks and Prevention Measures                     Other factors include:                                 - payment for goods not supplied
With the rapid advancements in technology, frauds       - using common registers, drawers and lockers
are becoming more sophisticated, widespread and                                                                - private purchases being made through company
                                                          among staff
complex. As a result, stamping out fraudulent                                                                    accounts
practices becomes a huge challenge and requires         - paying claims without appropriate authorisation or
extra vigilance on the part of businesses and             receipts                                             These types of fraudulent practices often occur
individuals                                             - not supplying details of purchases on claims         because of poor supervision and training or

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