Handling of employee fraud.

[letteredhub]

A business person who owns a company  must ensure to have internal control and structure in your organisation. With a functional internal control, employees display best practices, discipline and solemnity with how they dispose their jobs, resume and attend to work on time etc. Internal financial theft and misconduct are detected asap, then reducing the risk of collapse of the organisation from internally which are related with employee fraud.

Most times, you find an unfair reward system within a working environment. Most staff ends up being underpaid while they do all the job and overtime and in all that, they still don’t have much to say to their employer due to lack of jobs.

I’m systems like this, you find staff developing certain tendencies to be fraudulent and capitalize on loopholes within the system. A good employer should be able to motivate his or her staff from time to time and organize seminars that addresses concerns. There should be a system in place that manages the welfare of staff.

Not everything is about trying to solve the issue after it has occurred but, you do your best to ensure your staff are happy and socialized.

I perfectly have a clue of all what you've mentioned to what could make a staff to be stealing from the company he's working in. But after all if we evaluate it you would agree with me that it still doesn't warrant staff fraud of the company because as the condition of theft continues to progress and eventually results to the shutdown of the company due to shortages of funds to run the organisation which could have occurred due to the persistent looting of the company's resources/funds into private pocket. At the shutdown of the company, where else does the worker intend to go get a job again since Jon's are lacking to find?

True, every worker should be managed properly both in his renumeration and working conditions but where you're not giving the best that resonance to your ability and skill then you can always resign than stealing. The excuse of insufficient jobs availability shouldn't make people suffer without speaking up to their management about it.

[junder]

I once worked as a store clerk but not as a cashier, and I saw irregularities occurring that led to the store manager. As time went on, these irregularities continued until finally the store manager made a mistake that revealed he was committing fraud, namely always taking money from the cash register every time the store closed, while the financial losses were the responsibility of all employees. Actually, looking at a resume alone is not a guarantee, because a person can change when they see an opportunity.

[Agbamoni]

You have a point, some employees can get away with fraudulent activities and it might not be detected because they are smart enough to cover it up due to the experience that they have and the fact is some employers are not even smart enough to spot this on time.

The reason why employees get away with cheating and fradulent act in a company without being noticed is that the employer has no idea how to run the company or business. One man cannot do it all, that's what i always tell my freinds around me. If you are good at HR, focus on it, and employ someone good at managing the business. That is the reason why companies employ managers because of the experience they have and how they can sort out fishy activities while enforcing steady operation in the company.

[Razmirraz]

Sometimes the biggest challenge that leads to business shutdown isn't from external competitions around the business environment but from within the workforce.

A business person who owns a company  must ensure to have internal control and structure in your organisation. With a functional internal control, employees display best practices, discipline and solemnity with how they dispose their jobs, resume and attend to work on time etc. Internal financial theft and misconduct are detected asap, then reducing the risk of collapse of the organisation from internally which are related with employee fraud.

You can implement effective internal controls to prevent losses and improve performance. When this system is implemented, employees will be more disciplined and responsible in carrying out their duties. You can implement several ways to improve internal control, such as creating clear policies and procedures, conducting regular supervision and monitoring, providing training and development to employees, implementing effective security and supervision systems, and giving bonuses to high-performing employees. If this system is implemented, the company can reduce the risk of loss and improve overall performance.

[ZAINmalik75]

Perhaps a well rounded routinely monthly evaluation can be set in place in the organisation which could be a form of internal surveillance on job performance, financial arrangements and expenditures, and on the part of external surveillance that would be another layer of security within work environment against internal theft is the installation of CCTV cameras in and around the workplace. It helps monitor situations without you directly having eye on everyone.

All of these points are good, and I agree that we must have a proper internal control system, because it is something that every business, regardless of its size, should have, because fraud from employees is something that can happen in any organization no matter how big it is, so a proper system in place is necassary.

CCTV is a good point, but it is alone not enough for the problem, because a person who is determined to commit the fraud will find ways around it eventually. Still, in many organizations, or small businesses, employees are frauding while the cameras are working, they do it successfully because they know their way around it. The real solution starts from the hiring process itself, because if we are careful about whom we are brining in the business from the beginning, we reduce the risk of such incidents significantly. We should do background checks, their criminal records, references and probation periods are all things that can help us identify the kind of person we are looking for.

Monthly evaluation is a good one too, but we should also reward them once we do the evaluation so they do good the next time, like we should give them some kind of bonus, even if it is going out of our pocket.

[slapper]

Yes, we must have job descriptions and authority for employees to have limits on what is and is not allowed to be done in our business, this is very important to maintain company confidentiality, we also need to have an employment contract in which there must be an agreement for each company to maintain company confidentiality, if violated must be fined, this is a strong legal source for us as owners to maintain our business well, fraud in the company can be in many ways we need to have comprehensive monitoring so that our business is safe.

Setting rules for employees and being approved before entering work or entering into a work contract is a very good step to anticipate all forms of fraud that may occur by employees later, as a business owner must know the vulnerabilities that exist in his company when he has many employees.
Of course, each contract with different positions in the company has different specifications, such as the rules given to managers, financial staff and ordinary employees, of course, must have accuracy in the potential future with fines or punishments with different levels so that those who work in our company can have the fear of breaking the rules that have been agreed upon.

This is an effort to maintain company secrets and anticipate fraud that has the potential to harm the company. Punishment in the form of heavy fines is usually very useful to instill fear in violators.

We've been doing that for like what, hundreds of years of organized labor. Fraud didn't go nowhere so clearly something in the equation is being missed.

The thing about the people who commit fraud within the companies is they don't usually think of themselves as criminals. They believe they are righting an imbalance. Watched someone else get promoted for three years, underpaid for covering for the manager who did the mistake that one quarter. At some point there is a shift in the internal accounting. What begins as bitterness turns into permission. The contract doesn't get around to that conversation. It occurs entirely in someone's head.

Business owners do not usually discuss the inner culture as a fraud prevention mechanism. The conversation always gets down to compliance and monitoring and fines. But if your staff believes you're getting value from them and calling it job, they will find ways to get it back.

Punishment instills fear. Fear works on some people. But fear also makes people better at concealing things, not better at being honest. The one who actually doesn't want to steal because he or she cares about what will happen. They're not the one the punishment clause is designed for. And they're also the one most likely to leave if you make them feel like a threat by default.

I don't have a clean solution either. But I do think the conversation needs to include the question of what kind of relationship are you actually trying to build with the people who work for you. Contracts describe obligations and not relationships, and fraud occurs in the gap between those two things.

[silpersurfer]

I once worked as a store clerk but not as a cashier, and I saw irregularities occurring that led to the store manager. As time went on, these irregularities continued until finally the store manager made a mistake that revealed he was committing fraud, namely always taking money from the cash register every time the store closed, while the financial losses were the responsibility of all employees. Actually, looking at a resume alone is not a guarantee, because a person can change when they see an opportunity.

Fraud like this in conventional stores which still mostly use cash payments is very difficult to check, therefore CCTV is needed to monitor employees who make reports, fellow employees also need to pay attention to each other because the losses are borne by all employees.
Fraud like this can only be known from monthly reports and stock counts, but if it is digitally based and you can do transaction reports directly, you should be able to see after work if there is a difference missing from the money deposited.

[GeorgeJohn]

<..>

The reason why employees get away with cheating and fradulent act in a company without being noticed is that the employer has no idea how to run the company or business.[/quote] That's partially current....you can know how to run a company or manage a company and you have a criminal elements in your company...The only thing important in a company management is that, make sure that your security is intact....

One man cannot do it all, that's what i always tell my freinds around me. If you are good at HR, focus on it, and employ someone good at managing the business. That is the reason why companies employ managers because of the experience they have and how they can sort out fishy activities while enforcing steady operation in the company.

for you to have a perfect management in company, make sure that each section of the company have a controller or a sector manager, and also a security..then, you will have a general manager that supercedes all the sector controller...with department heads of each sectors, your security is guaranteed.

[Unknown Op]

I once worked as a store clerk but not as a cashier, and I saw irregularities occurring that led to the store manager. As time went on, these irregularities continued until finally the store manager made a mistake that revealed he was committing fraud, namely always taking money from the cash register every time the store closed, while the financial losses were the responsibility of all employees. Actually, looking at a resume alone is not a guarantee, because a person can change when they see an opportunity.

Fraud like this in conventional stores which still mostly use cash payments is very difficult to check, therefore CCTV is needed to monitor employees who make reports, fellow employees also need to pay attention to each other because the losses are borne by all employees.
Fraud like this can only be known from monthly reports and stock counts, but if it is digitally based and you can do transaction reports directly, you should be able to see after work if there is a difference missing from the money deposited.

Employees always try to steal the things because they have less resources and they want to fulfill their needs which is not possible by salary and they are doing that kind of things to make more money. If people will have more salary then there will be more greed in them . People are taking risks because cameras are watching them because in the every shop and factory there is camera which is watching the work of people. If you will do more work then you will get money but that is in the control of your boss so you should try to start your own business and many people have no idea to do their own business and they are wasting their time in job . Monitoring is important because we saw many businesses which are close due to that kind of frauds of employees.

[Mame89]

The case of internal or employee fraud has destroyed lots of businesses and in as much as other factors can contribute to it This is one of the main issues and the employer has to be blamed for all that. workers should be employed not based on sentiment or personal relationship, this is what has led to the collapse of a lot of businesses today, People should be employed based on competence and they should be monitored.

Yes. If you're starting a business it's best not to hire friends or relatives as employees because you'll be reluctant to face reprimands. If you don't your business won't grow and you'll likely be fired. If you don't you'll feel bad about spending your salary on them which will be a waste. So, when hiring employees, it's best to base your decisions on competency, not personal relationships.

Business success often depends on employees. If an employee cheats, they should be fired and replaced with someone with the same competency. Likewise, when you have an excellent employee, you can be lenient with them, because business success usually stems from the contributions of employees who are sincere in their work.

[Finestream]

In every business, betrayal is always possible especially if you trust a person too much that will often lead to get easily deceived. This is one of the biggest challenge when hiring people, particularly for strangers as you can't be sure if you can build trust on them since you don't hold their motives and goals from the very beginning.

That's why hiring people is also one the risks in building a business. There are people that turns as asset to your business, but there are also assets that turn threats every time your eye is not on your business, when you're busy with something else.

[DrBeer]

Sometimes the biggest challenge that leads to business shutdown isn't from external competitions around the business environment but from within the workforce.

A business person who owns a company  must ensure to have internal control and structure in your organisation. With a functional internal control, employees display best practices, discipline and solemnity with how they dispose their jobs, resume and attend to work on time etc. Internal financial theft and misconduct are detected asap, then reducing the risk of collapse of the organisation from internally which are related with employee fraud.

This is a very delicate issue. To begin with, in my opinion, we should recruit competent, results-oriented employees. Secondly, the remuneration and motivation model should be designed to ensure that they work effectively. ...

Recruiting competent employee with reputable background is important and, as for renumeration, I feel some of the time that this happens in an organisation it ain't about the renumeration model but about the employees character, some employees just want to get rich quickly and they think stealing from the company would help aid their primitive accumulation towards self enrichment.

I think that systematic theft within a company is fairly easy to detect if the company’s accounting system is set up properly. It’s also worth looking at a candidate’s work history and references from previous employers—this is standard practice. So the problem probably lies less with the staff and more with poorly organized business management.

[Cheema02]

In every business, betrayal is always possible especially if you trust a person too much that will often lead to get easily deceived. This is one of the biggest challenge when hiring people, particularly for strangers as you can't be sure if you can build trust on them since you don't hold their motives and goals from the very beginning.

That's why hiring people is also one the risks in building a business. There are people that turns as asset to your business, but there are also assets that turn threats every time your eye is not on your business, when you're busy with something else.

Its an understood thing that in business we don't avoid people entirely and also not totally trust on any body because its the demand for success in business. For every success story we need a group of trusted staff who helps in growing the business. So its not means that we trust blindly on daligation so give award on best performances and give the seats in merit and regularly defines the role of individuals may help to prevent from betrayal. So creates system in which transparency enriched with culture so the employees thinks and work like partners not as employee. Its very clears that when individuals give respect they obviously give it rewards. With these regulation owners should creat systems which designed in way that work in the absence of owners. Trust is much more important in business and its take time to built and requires consistent behavior so owners should be careful while hiring.

[Dareo]

Well I think employee fraud doesn't necessarily happen all of the sudden, it builds up slowly, when someone is repeatedly neglected or feels like they're not getting the right amount of value for their work that can build up a negative mindset inside a person, So I think that just having strict rules and monitoring won't solve the problem. If people are trusted and treated fairly, the vast majority of the time they will do the right thing.

[aylabadia05]

A business person who owns a company  must ensure to have internal control and structure in your organisation. With a functional internal control, employees display best practices, discipline and solemnity with how they dispose their jobs, resume and attend to work on time etc. Internal financial theft and misconduct are detected asap, then reducing the risk of collapse of the organisation from internally which are related with employee fraud.

The selection of employees plays a crucial role in determining how a business operates. Even though they are merely employees and not the business owners, an employee’s work ethic can make or break a business, often leading to its success or failure at a relatively early stage.
If they are the first employees and possess all the necessary qualities, it is essential to take them seriously so that they do not merely work as employees, but approach their work with the mindset that their job is their own.

[Findingnemo]

This is challenging for both small and big companies that is why there has to be a system in place that checks on itself with hierarchy, so cheating as an individual should not be possible unless everyone decides to go on the same page. But with the level of technology now we can almost automate the finances and only trust the few people to handle the real money.

[serjent05]

You have a point, some employees can get away with fraudulent activities and it might not be detected because they are smart enough to cover it up due to the experience that they have and the fact is some employers are not even smart enough to spot this on time.

The reason why employees get away with cheating and fradulent act in a company without being noticed is that the employer has no idea how to run the company or business. One man cannot do it all, that's what i always tell my freinds around me. If you are good at HR, focus on it, and employ someone good at managing the business. That is the reason why companies employ managers because of the experience they have and how they can sort out fishy activities while enforcing steady operation in the company.

But this does not guarantee that the person employed will not cheat the employer.  We all agree that each person has a different forte, but this does not include whether the person will cheat or not in his work. 

So the best thing to solve employee cheating is to have a proper monitoring system.  This monitoring system will serve as the employer's eye to see what their employee is doing. 

[sana54210]

Its an understood thing that in business we don't avoid people entirely and also not totally trust on any body because its the demand for success in business. For every success story we need a group of trusted staff who helps in growing the business. So its not means that we trust blindly on daligation so give award on best performances and give the seats in merit and regularly defines the role of individuals may help to prevent from betrayal. So creates system in which transparency enriched with culture so the employees thinks and work like partners not as employee. Its very clears that when individuals give respect they obviously give it rewards. With these regulation owners should creat systems which designed in way that work in the absence of owners. Trust is much more important in business and its take time to built and requires consistent behavior so owners should be careful while hiring.

There are so many companies around the world who hired people based on nepotism or just corruption and that's why they bankrupted. Hiring someone because they are your nephew or hiring them because they are your friends son or whatever, means that you are not going to end up with anything good, you should be avoiding that. Hire them based on their quality.

I always hated HR because to me it looks like HR hates people who have a great CV and better than them, so they try to get rid of those people and call up people who are looking worse so they can bully those people. But the reality is that we are not going to see things change that easily, it will not be simple and we should be avoiding that for as long as possible. I would make hiring my own job, even if I am very busy and CEO of a thousand people job, make sure it's managers who hire not the HR.

[eightdots]

This is challenging for both small and big companies that is why there has to be a system in place that checks on itself with hierarchy, so cheating as an individual should not be possible unless everyone decides to go on the same page. But with the level of technology now we can almost automate the finances and only trust the few people to handle the real money.

Trust is one of the most important elements for a business because where there is no trust, it is difficult to achieve efficiency. Audit systems prevent many problems from arising. Even after problems arise, they can prevent them from escalating. The functioning of the audit mechanism is crucial, and this functioning leads to positive results for the future of the business.

A proper audit must be conducted. If the audit is far from being a true audit, it provides no benefit. Auditors play a vital role in this.

[slapper]

Its an understood thing that in business we don't avoid people entirely and also not totally trust on any body because its the demand for success in business. For every success story we need a group of trusted staff who helps in growing the business. So its not means that we trust blindly on daligation so give award on best performances and give the seats in merit and regularly defines the role of individuals may help to prevent from betrayal. So creates system in which transparency enriched with culture so the employees thinks and work like partners not as employee. Its very clears that when individuals give respect they obviously give it rewards. With these regulation owners should creat systems which designed in way that work in the absence of owners. Trust is much more important in business and its take time to built and requires consistent behavior so owners should be careful while hiring.

There are so many companies around the world who hired people based on nepotism or just corruption and that's why they bankrupted. Hiring someone because they are your nephew or hiring them because they are your friends son or whatever, means that you are not going to end up with anything good, you should be avoiding that. Hire them based on their quality.

I always hated HR because to me it looks like HR hates people who have a great CV and better than them, so they try to get rid of those people and call up people who are looking worse so they can bully those people. But the reality is that we are not going to see things change that easily, it will not be simple and we should be avoiding that for as long as possible. I would make hiring my own job, even if I am very busy and CEO of a thousand people job, make sure it's managers who hire not the HR.

Quality is not objective. I know we talk about it like it is. The very same HR department you're criticizing is ostensibly hiring based on quality too, their version of it. This includes things like cultural fit, did you make them feel safe during the interview? And even whether your ambition read confident or threatening. That distinction is completely subjective and almost never approached in an objective way.

And I'm not defending bad hiring. I'm saying the problem is more than nepotism. Meritocracy as a frame has failure modes of its own. When you say hire on quality you still have to have a common definition of quality. Thus, a system which can actually perceive it, and people whose own ego doesn't interfere with the evaluation. None of that is guaranteed. Very little of it is common. And this is why this suggestion about managers hiring their own teams is more important to me than you might think. Not just because managers are aware of the job. But because the cost falls on the managers. If I hire badly I live with it.

What's funny retrospectively, I think a lot of people know this. They know their organization hires badly, selectively, sometimes corruptly. They know who got in through which door. And they've come to terms with it through a particular kind of dissociation in which work is not something you invest in, but something you endure in order to survive. The fix should be to target a culture created by people who are not afraid to be uncomfortable. Who can hire someone better then them and feel proud of that rather then threatened. Those people exist. They're just not typically those running the process.