Signs of Employee Fraud or Theft in Your Organization

It’s unfortunate, but fraud or theft on the part of employees is all too common. It’s estimated that one-third of employees will steal if given the opportunity. Theft costs employers nationwide about $50 billion every year.

Signs of Employee Fraud in Your Organization

How do you protect against employee fraud or theft? Vigilance. Watch out for these warning signs of employee fraud or theft.

  1. A sudden upward change in spending habits. If someone is suddenly driving an expensive car with a decidedly moderate income, wonder why. It could be entirely legitimate: a gift, a bequest in a will, or good investments. Maybe he or she has been saving for a long time. But sudden evidence of large expenditures is a leading sign of theft or fraud. Expensive homes, clothes, vacations — all could be signs if the person could not afford these things on a salary.
  2. Working before or after hours. If people are either stealing or committing financial fraud, it’s easier to do it when no one’s in the office, right? If they’re juggling the books to hide amounts they’re taking, no one will accidentally walk in while they’re doing it. If they’re stealing equipment like printer ink or cartridges — or even backup computers — an accomplice could help before or after hours. Put sudden requests to work very late or very early on your radar. Especially if the employee is there more than an hour before or after normal hours, it’s suspicious.
  3. Consistent discrepancies. Some theft is minor, but adds up over time. Do you have an employee who consistently has trouble reconciling the outgo of petty cash with receipts? Are the receipts in other accounts discrepant? Are some travel and expense receipts always lost? Accidents happen, of course — that’s one of the reasons accounts are reconciled! What you’re looking for is a pattern.

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