Identifying Red Flags Indicating An Employee Fraud Within Your Company

Trust in a workplace, especially between bosses and employees is crucial for businesses. To sustain long-term success, everyone needs to be pulling in the same direction. As a boss, you need to be confident in the belief that everyone in your company has the business’s best interests at heart.

However this isn’t always the case. Employee fraud is a very real and persistent problem for companies. Inventory theft, embezzlement, and payroll fraud, are just some of the occupational crimes that can be perpetrated by employees and might need the intervention of a fraud investigator in Singapore. To help clamp down on employee fraud, we’ve put together a list of red flags to look out for.

No company that moves large quantities of items can be expected to keep track of all their stock. Things break, get misplaced, or get lost during shipping. However some employees take advantage of this to steal company property. If you notice a trend of inventory shrinkage over extended periods of time, it may be a sign of employee fraud.

Related to this is missing documents. To cover their tracks, employees might resort to removing important documents that might implicate their actions. Such documents may include invoices, sales and purchase data, inventory reports, and stock taking schedules. If you notice critical documentation missing regularly it might be good to begin corporate investigations.

Unexplained cash transactions, account statements that don’t add up, increase in expenditure. These are all inconsistencies in company accounts that might point towards employee fraud. To combat this, it’s good to review company accounts frequently and monitor employee reimbursements.

If there are numerous complaints in one department or towards a specific individual in a company, it might be worth taking a closer look. It could of course be simply personality or work clashes, but it might also indicate an ongoing employee fraud.

Frequent customer complaints, especially involving under-packing of products, can also be a red flag. Whether it’s an issue with quality control or deliberate theft, it can be good to have a corporate investigation to get to the bottom of it.

Adjusting entries are important for accurate financial statements and tax filings. But they can also be used to cover up misappropriation of funds. Excessive adjusting entries are a clear red flag and it should be policy that each entry is accompanied with notes clearly stating the reason for the adjustments.

If an employee is engaged in fraud, there may be tell-tale signs in changes to their lifestyle which you can spot. If an employee is spending more than their paycheck would allow them to, by purchasing items like luxury goods or expensive cars, it is recommended to keep a closer eye on their activities.

Close links between an employee and a supplier or contractor is also fertile ground for employee fraud. Personal or familial connections could give rise to contract decisions that may not fairly reflect company interests. There is also potential for outright fraud where employees might negotiate favourable contracts in exchange for a cut of the profits.

If you come across any of these red flags, then calling in a professional fraud investigator is the best option. They have the expertise, experience, and most of all bring with them an objective, unbiased view of the situation at hand.

Looking for corporate investigation services in Singapore? Contact us today and let us know how we can help.