By Karen E. Klein, Special to The Times
August 11, 2008
Answer: U.S. businesses lose about 7% of annual revenue to fraud, and small companies report a median loss of $200,000 to employee fraud, according to the Assn. of Certified Fraud Examiners. Typically, embezzlement schemes last two years before detection.
Dana Basney, director of forensic accounting services for Mayer Hoffman McCann, said you should divide accounting functions among workers, and don’t give the person who collects your cash access to your accounts receivable.
“Perform background checks on all your employees. Do not rely on a trusted individual’s recommendation — obtain information about potential employees from an independent third party,” Basney said. You should get bank statements and canceled checks directly from the bank and review them before giving them to any employees.
And have your accountant periodically review your internal controls and records. “This tells employees that others are watching,” Basney said.
