OCCUPATIONAL FRAUD IN SMALL AND MEDIUM BUSINESSES

Occupational fraud is the kind of fraud committed by employees of a company. This kind of fraud is also known as insider fraud and is always difficult to control in a situation where a company’s internal control is relatively weak. Small and medium sized businesses are particularly prone to falling to the tricks of occupational fraud perpetrators.


There are conditions that must be met before occupational fraud could take place. Those three conditions are what are called the fraud triangle. They are opportunity, pressure and rationalization.

Occupational fraud has singly accounted for over 40% of the totality of frauds that has taken place in business community as a whole. It takes the activity of an insider for an outsider to successfully operate. Many company and businesses have started taking the right action in the right direction to combat this ugly situation by engaging the services of forensic accountants and other fraud fighters.

The presence of forensic accountants and fraud examiners in a business instills fear in the mind of workers thereby making them do their possible best to stay away from occupational fraud of all kind.

Good internal controls and high spirit of workforce is the key to curbing occupational fraud. It is not just enough for people to state rules, principles, and procedures on paper without implementing it. The contents of the internal control ‘bible’ should be implemented to the letter. Management should be prepared to adhere to the advice proffered by the internal control experts in the advisory board.

Access control and other security issues should be taken seriously by all that really wants to squarely face occupational frauds. Access control simply means restricting how resources are used in a business. There is the physical and logical access control. The physical access control deals with the physical protection given to assets, while logical access deals with rights to access information via the computer and other network devices.

Again, education of staff members can help reduce occupational fraud in small businesses. Educating your workers will place them in a situation to recognize fraudulent activities whenever they see them going on.

Establishing and upholding good corporate governance is another good tool to fight occupational fraud in our businesses. With good corporate governance in place, occupational fraud will have no place to hide its ugly work in our company. Good corporate environment will enhance the working experience of workers and make them become more productive in their work.

The company that I worked for as a forensic accountant successfully fought occupational fraud by creating a conducive work environment.

Occupational fraud is a threat to business community as a whole and needs to be seriously dealt with. It begins from you, learn the basics of fraud fighting today and be glad you did.

The following books can be bought to leanr more
Third highest occupational fraud rate afflicts health care.(PRACTICE TRENDS): An article from: Family Practice News

Or better still, Search Amazon book shop by following the link below.

Search Amazon.com for occupational fraud