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The Types of Corporate Fraud That a Private Investigator Can Help With

A 2017 survey by the Association of Certified Fraud Examiners (ACFE) revealed that Canadian businesses that said they’d been defrauded, reported a median loss of USD 200,000. These cases lasted a median of twelve months before they were detected. In short, fraud can be a costly, time-consuming problem to resolve and recover from, particularly if left undetected.

Fraud doesn’t only affect large corporations; in fact, smaller companies may be more vulnerable because many lack sufficient fraud detection plans. William Vasiliou, president of the Toronto chapter of ACFE notes that: “There may be a financial issue with putting policies in place, or a sole proprietor may not be fully aware of how to detect fraud.” In addition to these financial losses, occupational fraud can also damage a company’s reputation, which can be even harder to recover from.

Being aware of the different types of corporate fraud is the first step to preventing it from happening in your company. In this blog, we’re sharing the most common types of corporate fraud that every business owner should be aware of, and how a Private Investigator can help you effectively respond to and mitigate these risks.

According to CPA Canada, most employee fraud falls into three categories:

  1. Misappropriation of Assets

    • Stealing cash, services, inventory, time
    • Falsifying expense reports
    • Falsifying purchase orders from fake vendors
    • Using a company credit card for personal expenses, or company resources for personal use
    • Falsifying sales to collect commissions
  2. Corruption

    • Colluding with a vendor: making false payments for things that aren’t actually delivered
    • Colluding with a health care provider: faking health insurance claims
    • Accepting kickbacks from a third party in exchange for favourable treatment
    • Colluding with a supplier: replacing purchased goods with lower quality or counterfeit ones
    • Offering bribes to another business or individual in exchange for business advantage or personal gain
    • Violating non-compete agreements, or selling intellectual property
  3. Financial Statement Fraud

    • Falsifying sales records to inflate earnings
    • Postponing reporting expenses to a later period to inflate current earnings
    • Inflating the value of an asset

At Star Quality Private Investigations, our Expert Corporate Investigations Team comprises former law-enforcement officials who are highly experienced in all facets of Corporate Fraud Investigations and can serve as an Undercover Boss where necessary, to help isolate weak areas in your overall operations. Here’s how we can help you detect and investigate existing instances of fraud, and how we can help you better safeguard your businesses going forward:

 

  • Employee Theft, Fraud, and Corruption Investigations

Fraud and corruption are more likely to occur when monitoring is reduced, as has been the case over the COVID-19 pandemic. Many businesses are opting to stay remote or function as a hybrid model, so business owners need to be prepared to detect and investigate misconduct. We have the knowledge and experience to spot patterns of behaviour that indicate fraud, and the resources to obtain solid evidence against offending employees. Using advanced surveillance techniques and Undercover Boss/Secret Shopper investigations, we can look for fraud indicators like employees’ spending habits, addiction issues, family financial problems, close relationships with suppliers and clients, and anything else they may be trying to conceal. Whether it’s happening right under your nose, in the field during work hours, or offsite while the employee is on vacation, we’ll find out what they’re doing when and with whom. When you take action against the employee, we’ll provide you with solid, objective evidence for your case.

 

  • Competitive Intelligence and Non-Compete Clauses

From company secrets to proprietary resources to client data, you need to make sure your company is not being undermined by employees sharing things with your competitors. We can conduct background checks on current employees or prospective candidates you’re thinking of hiring, to make sure they’re working to help you, not to harm you. We can also investigate former employees who are bound by a non-compete clause to ensure that they’re abiding by their contract.

 

  • Corporate Risk Management

Being proactive will put you in the best position to remain successful. Identifying the gaps in your procedures and policies will minimize your financial losses while protecting your company’s reputation and ensuring the trust of your employees and your clients. Our team can perform an objective analysis of your company and its operations to assess your current risks, and then help you put measures in place to minimize them.

 

Whether you’re responding to a suspected instance of fraud or are proactively enhancing your anti-fraud protocols, you deserve a partner who will look out for your business. With decades of experience in fraud and workplace investigations, risk assessment and fraud prevention, employee background checks and screening, and surveillance and undercover work, you can rely on the skilled Corporate Investigations Team at Star Quality Private Investigations to help you protect your company’s assets and reputation. Call us today to learn more about how we can help you meet your business goals for long-term success.

 

 

Source: https://www.cpacanada.ca/en/news/atwork/2019-01-10-fraud-signs

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