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Bosses fear employee fraud

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Fraud is now considered to be as big a threat as burglary, however many employers are failing to take the most basic precautions. Research carried out by financial advisers MacIntyre Hudson, shows that 38 per cent of employers questioned pointed to fraud as the single biggest threat to their business.

The biggest concern is the possibility of fraud by employees, with 27 per cent of owner managers believing employee fraud as the biggest risk to their firm. Although no manager would dream of leaving premises unlocked, they seem less vigilant when it comes to fraud. Only 39 per cent ever check for irregularities through on the spot checks.

While 82 per cent of business owners claim to check referees provided by new employees, only 39 per cent check the legitimacy of academic qualifications and criminal records. Also, only 26 per cent of employers polled required double signatories on checks and only 11 per cent ever change staff who reconcile their bank accounts.

Howard Lewis, partner at MacIntyre Hudson, said, “ Fraud in the workplace is as common in a smaller business as in a large company. However, for small businesses, it is more difficult and time consuming to undertake the necessary checks.

“Moreover, the close family-type working environment which characterises many owner-managed businesses is often based on mutual trust. Whilst the vast majority of people are honest, this situation does mean that directors can let their guard down and staff can start to abuse the trust that is bestowed upon them.

“We cannot stress enough how important it is for owner managers to foster an environment where trust is combined with vigilance and backed up with robust systems to remove temptation.”

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