What is a wise next step once you, the small business or not-for-profit manager, has discovered workplace fraud? Consider enlisting a squad of professionals, be it a CPA, a Certified Fraud Examiner, law enforcement, an attorney, or other advisors. Let’s profile some of the scenarios:
- CPAs – While a CPA are a good resource, remember their primary function is not to detect fraud. Instead, consider tapping a forensic accountant, typically a CPA who is also a CFE (Certified Fraud Examiner) or CFF (Certified in Financial Forensics).
- CFEs – Unlike CPAs and some forensic accountants, CFEs are often equipped and trained to confront suspected fraudsters and embezzlers. By virtue of their skill sets in investigations, law, financial review, and criminology, an effective CFE may eliminate additional examiners. Choose wisely, however, not all CFE’s have strong financial knowledge or backgrounds.
- Law enforcement– Law enforcement officers are a strong ally and may even be necessary for working with some insurance agencies. But with limited resources, even top notch law enforcement may not bring the speedy resolution you want or need.
- Attorneys – Although you may ultimately need one, remember criminals can also enlist their own attorney. Beside, having an attorney does not prevent the criminal from skipping town, destroying or hiding evidence, or countersuing with a baseless suit.
- Crime Insurance Agencies – Investing in crime insurance for your business is a wise protection, but claims often involve time-consuming examinations. Factor in the scrutiny of an audit, unforeseen delays, and the possibility of a denial.
Data supports occupational fraud accounts for 5% of annual gross revenue, the average loss being $145,000. Workplace fraud is a headache to be sure. The best defense after an offense is knowing your options for presenting a winning counter move.