Think fraud can never happen to your company? Think again! Fraud can cost business owners a ton of money and time! We’ve seen it happen!

The “Outside Job”

A client shared this disturbing story with us.

Our client’s daily routine was to fill up their fuel truck so their driver could deliver fuel to job sites and fill heavy equipment vehicles used in their business. The filling station attendant would fill the truck while the driver waited in the cab. The pump only reads to a maximum of $1,000 so as they would reach the maximum, the attendant would shout “$1,000”, reset the pump, keep filling and then shout “$2,000”, etc. until the tank was full. (Normally, there is approximately $3,000 of fuel pumped each time.) The attendant would then provide a receipt to the driver in duplicate and they would both sign off on the sale. Sounds good right – until fraud reared its ugly head. Sadly, our client found out that the attendant was not pumping to the $1,000 mark. When he shouted to the driver “$1,000” he was only pumping to around $875 and then quickly re-setting the pump before the driver could notice. He probably did this on each reset. Likely on every fill, our client was cheated out of several hundred litres of fuel.

The “Inside Job”

While fraud from the outside is distressing to business owners, fraud from within the company is particularly devastating. Most owner managers have a high degree of trust in their employees, especially those dealing with their company’s financial matters. However, since most fraud incurring in Canadian businesses are inside jobs, owners are placing what amounts to blind trust in their personnel and this could be risky!

For example, we have seen repeated instances of fraud where one staff member has sole access to cheques, on-line banking, accounting software and bank statements. They’ve managed to get away with everything from personal car repairs to making electronic payments directly to their personal bank accounts. One bookkeeper even wrote himself a cheque forging the owners signature – and not even a good forgery at that!

What Can You Do?

As a business owner, don’t abdicate your responsibility because you think it can’t happen to you! There are some simple control measures that can eliminate fraud risk that don’t require a lot of your time or money. Contact your accounting or audit firm today and protect yourself from fraud!