May 03

Financial Infidelity

Posted by Glenn Talbot at Thursday, May 03, 2018

Internal theft costs organizations worldwide an estimated 5 percent of their annual revenues, according to the Association of Certified Fraud Examiners. Price Waterhouse Cooper’s 2018 Global Economic Crime and Fraud Survey finds that 49% of global organizations say economic crime has been experienced by them in the past two years. People inside the organization perpetrate 52% of all frauds. A scary thought, and what about those that aren’t aware? Who is cheating the system, stealing money and why?

We are often called when it is too late. An audit, or a late reconciliation after months of theft will reveal ‘something is up’ then the damage is done!

Often once a theft has been discovered and assessed there will be an underlying problem happening with the perpetrator. Gambling and drug addiction are common factors we see from employees and even business partners. It is very sad, however it is a part of business that must be addressed and identified as soon as possible.

If someone had the mindset and considered it, they will look at the system and find a gap, like a burglar, find a weak spot and use that.

Take a look at what numbers the business has been doing on a regular basis, I always suggest doing this monthly if not weekly and look for anomalies. Leaving it longer can be risky and so damaging. Often small businesses never fully recover from employee theft in the thousands or even hundreds of thousands because of the impact it has on cash flow, not to mention the emotional impact.

Whilst we are trained experts, there are things you can be doing to assist prevention and early identification of theft. Employee theft investigation needs to be swift and effective.

One method we see time and time again is false invoices, someone pays cash and the person stealing will put that money aside and throw away the invoice or delete it. It is when a customer returns for some reason with an invoice that cannot be located, that alarm bells should ring.

Signing off on cash books and checking for missing numbers, bank deposits that do not add up, checking your cash drawer, these are all small things that can help identify a problem. You must have managerial checks and balances in place to help keep your finger on the pulse. Otherwise, it is like leaving the front door open to your house, hoping no one will come in and steal.

It is also very important not to make accusations, as you will require proof that a crime has been committed. However, one tip is not to let on that something is going on within the organization, as this can alert a thief and they can then attempt to cover tracks hindering the investigative process. Gathering evidence is important and then notifying the correct authorities. BUT ALWAYS consider doing a police check. So many people who choose poorly to steal from their employers or business partners are serial offenders and will do so repeatedly, there can be a trail of disaster behind them that only a police check will reveal. You can download a police check here*

Confidentiality is also crucial, as often a business owner is in denial, someone they trust or have let in their inner ranks might be betraying them, and it can make them feel silly, or naive. However we know from the latest statistics, forensic infidelity is high, it can happen to anyone. If you suspect something might be going on, don't ignore that instinct. Some of the MOST prestigious companies in the world suffer from internal theft, so it really can happen to anyone.

To find out more how you can Fraud proof your business, protect against theft or if you suspect forensic infidelity you can contact us on 0425 851035 or via email at