When someone takes from the business.
WHAT FORMS IT TAKES
Theft of cash, stock or assets False expense claims Fictitious suppliers or employees Diverting customer payments Manipulating records to conceal any of it
WHAT ENABLES IT
Single-person control No reconciliation No verification of suppliers Trust substituted for control Nobody reviewing
WHY TRUST IS NOT A CONTROL
Frauds are overwhelmingly committed by trusted long-serving people, because they are the ones with access.
WHAT THE WARNING SIGNS ARE
Reluctance to take leave Resistance to others handling their work Lifestyle inconsistent with income Records not available when requested Reconciliations persistently delayed Complaints from suppliers or customers about payments
WHY RELUCTANCE TO TAKE LEAVE
Ongoing concealment requires presence.
WHAT TO ESTABLISH
Mandatory leave, with someone else performing the role.
WHY IT WORKS
It is among the simplest and most effective detective controls.
WHAT TO DO ON SUSPICION
Do not confront immediately Preserve evidence and access records Take advice Investigate properly
WHY NOT CONFRONT
Evidence is destroyed and the opportunity is lost.
WHAT TO ESTABLISH
Whether to involve the authorities.
WHAT TO CONSIDER
The seriousness, the evidence, and the obligations.
WHY IT DESERVES THOUGHT
Recovery is often the priority, but concealing serious criminality has its own consequences.
WHAT TO DO ABOUT RECOVERY
Pursue it, through proper process.
WHAT TO NEVER DO
Accept repayment in exchange for concealing a serious matter from authorities where reporting is required.
WHAT TO ADDRESS
The control gap, which will otherwise be used again.
