Educate Your Clients About Fraud

Source: The CPA Journal

Business owners who understand the red flags of fraud and fraud's potential impact on their bottom lines know when to seek professional help in conducting fraud risk assessments and fraud investigations. In this article, author David Gannaway offers several fraud prevention tips for business owners, including:

• Recognize that fraud is common and may be committed even by the most trusted employee.
• Understand fraud's potential financial impact. The typical business loses five percent of its gross revenues to fraud.
• Conduct a fraud risk assessment to evaluate internal controls and vulnerability to fraud.
• Set the “tone at the top” and develop a code of conduct to establish acceptable business practices and create a “low-tolerance atmosphere.”
• Set up a whistleblower hotline.
• When fraud occurs, engage an experienced fraud investigator.

For the complete article, read “Fraud Prevention Tips for Business Owners and Employees.”

From The CPA Journal, A Publication of the New York State Society of CPAs, June 2013, http://www.cpajournal.com.