C:\Fakepath\Theft Control


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Theft Control: Who's Got Their Hand in Your Pocket?

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C:\Fakepath\Theft Control

  1. 1. Theft Control: Who’s Got Their Hand in Your Pocket?
  2. 2. Some Stats <ul><li>7 percent of ALL revenue in the United States , a total of $600 million, is lost because of employee fraud </li></ul><ul><li>Fraud occurs at small businesses as well where the average loss is $100,000 per occurrence </li></ul><ul><li>In a study of 100 cases, one third involved employees with 10 or more years of service with their respective companies </li></ul>
  3. 3. Why’d they do it? <ul><li>Financial </li></ul><ul><ul><li>Debt, medical bills, divorce, investment loss </li></ul></ul><ul><li>Personal Habits </li></ul><ul><ul><li>Addictions, affairs, greed, expectations </li></ul></ul><ul><li>Work-Related </li></ul><ul><ul><li>Not appreciated </li></ul></ul><ul><ul><li>Under Paid </li></ul></ul><ul><ul><li>Lack of respect </li></ul></ul><ul><ul><li>Treated poorly </li></ul></ul>
  4. 4. What leads to an opportunity? <ul><li>Inadequate segregation of duties </li></ul><ul><li>Company rules/unknown consequences </li></ul><ul><li>Rapid employee turnover </li></ul><ul><li>Operating in crisis mode </li></ul><ul><li>Lack of mandatory vacations </li></ul><ul><li>Poor channels of communication </li></ul>
  5. 5. The many ways to steal <ul><li>Embezzlement & pilferage </li></ul><ul><ul><li>Cash, ghost employees, use of office supplies, expense accounts, over/under charging customers </li></ul></ul><ul><li>Inventory shrinkage </li></ul><ul><ul><li>Outright theft, damaging goods, keeping customer receipts </li></ul></ul><ul><li>Computer fraud </li></ul><ul><ul><li>Sale of company data, moonlighting, manipulation of records </li></ul></ul>
  6. 6. Embezzlement & Pilferage <ul><li>Watch for reports that have been changed to “look neater” or “easier to understand” </li></ul><ul><li>Office supply shortage that does not match business use </li></ul><ul><li>Employees refusing to take vacations or promotions. </li></ul><ul><li>Customers complain about billing irregularities </li></ul><ul><li>Employees seem sensitive about questions regarding the procedures of the company </li></ul><ul><li>Consistent non compliance with operational procedures, “there is a quicker way to do it” </li></ul>
  7. 7. Inventory Shrinkage <ul><li>Inventory counts do not match up but cash matches sales </li></ul><ul><li>Increase in damaged goods </li></ul><ul><li>Customers returning goods without a receipt </li></ul><ul><li>Receipts not given to customers </li></ul><ul><li>Employee’s with “new toys” </li></ul><ul><li>Friends hanging around </li></ul>
  8. 8. Computer Fraud <ul><li>Employee’s working late with no reason </li></ul><ul><li>Employee’s not wanting anyone else working on their workstation </li></ul><ul><li>Employee is sensitive about you checking emails </li></ul><ul><li>Employee is secretive about activity when asked </li></ul>
  9. 9. Prevention <ul><ul><li>Separation of duties </li></ul></ul><ul><ul><li>Be involved </li></ul></ul><ul><ul><li>Keep employee moral high </li></ul></ul>
  10. 10. What else can we do? <ul><ul><li>Count Inventory regularly </li></ul></ul><ul><ul><li>Reconcile bank and credit card accounts </li></ul></ul><ul><ul><li>Do not pay for any expense without appropriate documentation </li></ul></ul><ul><ul><li>Limit access to company resources outside the business day </li></ul></ul>
  11. 11. Take Always <ul><li>Employee theft is a reality </li></ul><ul><li>It put’s my livelihood at risk </li></ul><ul><li>Theft increases my expenses </li></ul><ul><li>Employee theft can happen at any level </li></ul><ul><li>Pressure and opportunity along with integrity flaws can lead to theft </li></ul><ul><li>ACTION MUST BE TAKEN </li></ul>
  12. 12. For more information contact <ul><li>Robert LeMay, CPA </li></ul><ul><li>LeMay & Company </li></ul><ul><li>7830 Backlick Road, Suite 300 </li></ul><ul><li>Springfield, VA 22150 </li></ul><ul><li>703-912-7862 </li></ul><ul><li>[email_address] </li></ul>
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