What measures can you take to minimise the risk?
Employee fraud in small-to-medium businesses, unlike many other
causes of insolvency and business failure, can be prevented at
little or no cost to the business owner. In my experience, two of
the more common characteristics of small-to-medium businesses
are:
- They are owned and managed by people with longstanding business
and/or personal relationships, frequently family members.
- They have limited administrative resources, making it necessary
to authorise their employees to transact on their bank accounts,
often with minimal supervision and no separation of duties.
Therefore, a high degree of trust is needed between the owners,
management and employees, which is a result of their relationships,
and a requisite to be practically expedient. As such, the social
norms of trust and personal integrity are prominent among the
business's core values. While these are just two of many
qualities that make small-to-medium
