Is fraud present?

Fraud raised its ugly head again recently, when we were made aware that a senior person had taken approximately $400,000 out of a business over many years.

This person had an entitlement mentality that in her mind she was entitled to the money, despite the fact that she had been gifted a significant bonus for work competed.

Often these people are the managers or people with access to finance like bookkeepers. It is important you see your accountant and make sure that there are key checks in place for approving transactions for dealing with money. While it is impossible to stop people behaving fraudulently you can at least make it difficult for them and increase the possibility of finding them out.

In another case, we were aware of a bank manager that had taken over half of $1 million by falsifying records. Her colleagues thought she would be the last person they expected, as she had always been helpful and couldn't seem to do enough for people.

This is often a guise where people hide their true intentions. Think about it, if you are taking money surely you will be the be the nice person – you don't want to bring attention to yourself.

As a business owner, you need to have a good audit and pay properly. Often audits aren’t paid for properly, so it doesn't allow you to put the proper amount of time into these issues that will never be fully addressed. The best defense you have it is to see your local accountant and make sure as many internal controls as possible are built into the system.

At TaxAssist Accountants, we suggest that small business owners should make an appointment and discuss their controls and learn how they can can reduce the risk of fraud.

Call into your local TaxAssist Accountants shop today.

Date published 26 Mar 2018

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.