Business Fraud: Strategies for Fraud Prevention in Your Business

Business Fraud

What is business fraud?

Business fraud is a wide term. It can refer to crimes committed in business senior employees, or it can describe the attack on the company itself. At the end of the day, business fraud is almost always involved in someone who steals others according to the business trading.

Types of Business Fraud

There are many forms of business fraud, but can be divided into three categories: asset stealing, corruption and financial statements. Asset is misappropriated, although the cost is the lowest, it accounts for 90% of all commercial fraud cases. These are the plans for employees to steal or use their organizational resources. Examples of asset misappropriation is subjected to cash after recording, and formulate false cost reimbursement claims and / or adopt non-cash assets of the Organization.

In either case, this is a serious problem, which has many different forms, which is why it is important for today’s business fraud.


When someone uses your company’s salary system to steal money, the PAYROLL fraud will have a salary, thinking that someone pays for labor. People who have access to salary systems will be the most prone to this type of business fraud, but it can also have a wide hacker skill from anyone within or outside the company.

Someone can commit payroll fraud by:

  • Submit false schedules to pay more or others they get.
  • Send unauthorized bonuses.
  • Remittance to fake employees or the former staff.


Employees or business owners can submit financial statements for fraudandering for a variety of reasons. The most common thing is that fraudulents will manipulate financial records to make their assets, income or full net values, and make their debts, liabilities and losses a longer one minute. This type of business fraud is often dedicated to protecting loans or avoiding the consequences of financial goals.


Assets are used to be the most common employee type, often the easiest commitment. The misappropriation of misappropriation is intentionally stealing employers. Asset misappropriation can be divided into two categories:

  • Cash misappropriation: From the company directly stealing funds, whether it is transferred from corporate bank account, publicize unauthorized purchases or cash from the sale of the safe deposit box.
  • Non-cash misappropriation: Stealing the company’s non-cash assets. This may be in the form of office equipment, supply or inventory in unauthorized cases.

The best way to prevent assets from misappropriation is to have detailed inventory and financial records to capture the stealing before the company lost too much money.


The more income earned by the company, the more you must pay in your income tax. Taxes will be taxed when the company avoids high tax rates in higher tax parenthesis. Enterprises sometimes strive to pay less taxes by offset the income of the business or claiming false deductions. Some people can submit tax fraud through compliance with tax return forms or submit forged returns.

The tax evasion is that it is considered to be tax fraud when entering a tax.

Strategies for Business Fraud Prevention

It is critical to the organization, big or small, and a business fraud prevention plan. Imagine that your company may suffer a loss of employees in a year and a half. Fortunately, some methods can minimize fraud by implementing different procedures and controls.

Know Your Employees

Business Fraud criminals often show behavioral characteristics that may indicate fraudulent intentions. Observe and listen employees can help you identify potential fraud. Management and employees participate in and take time to understand them is important. Usually, attitude changes can bring you risk. This can also reveal internal problems that need to be resolved. For example, if the employee feels anger from the owner or anger boss, this can lead to him or she will cheat as revenge.

Make Employees Aware

Consciousness affects all employees. Everyone in the organization should understand the fraud risk policies including fraud, and the consequences related to them. Those who plan fraud will know that the management is watching and hopes to be intimidated by this. Honest employees will also realize that fraud or theft may signs. These employees are assets in the fight against business fraud.

Implement Internal Controls

The internal control is a plan and / or plan implemented to maintain the company’s assets to ensure its integrity of accounting records and blocks and detects fraud and theft. “If there is business fraud. For example, the retail store has a cash register employee, a sales personnel and a manager. Cash and check receipts should be unified by an employee, and another prepared deposit slip, the third paragraph will bring deposits into the bank this helps to reveal any difference in the collection.

Monitor Vacation Balances

Employees who have not missed a day have been impressed in many years. Although these may sound like loyal employees, this may be signs that these employees can hide things, and worry if they leave the office, then someone will find their fraud. It is also a good idea to rotate employee to the company. This may also reveal business fraud because it allows second employee to review the first activities.

Live the Corporate Culture

Active working environment can prevent employee from fraudulent and theft. There should be clear organizational structures, written policies and procedures and fair employment practices. Open strategies can also provide great business fraud guards because it allows employees to open communication with management. Enterprises and advanced management should be implemented by way of example and enable each employee to be responsible, regardless of the position.


Those who are willing to business fraud will not discriminate. It can occur in large or small companies in various industries and geographic locations. Occupational business fraud can lead to huge financial losses, legal costs and destruction, and ultimately lead to the collapse of the organization. If business fraud has occurred, the appropriate plan can significantly reduce the fraud of the loss or reduce losses. Companies’ policy known to the employee is one of the best ways to prevent fraud. Through policies, the steps and consequences of performing pointed out when someone who prevents fraud is critical. Attempting to prevent business fraud is cheaper than business, rather than being dedicated to fraud.

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