How to Identify and Stop Theft in the Workplace | Manage > Employees from D&B Small Business Portal

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How to Identify and Stop Theft in the Workplace

Interview with auditor Charles Sterck and fraud expert Tracy Coenen.

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Joel: Here’s a depressing fact. The Association of Certified Fraud Examiners estimates that the typical business will lose on average 6% of all revenues due to employee theft. And the news gets worse. The association has also found that small businesses suffer disproportionate losses because of the limited resources they have to devote to detecting fraud. How do you avoid such losses? What are the telltale signs you should be looking for to identify a thief in your workplace? Let’s listen to a conversation between Chris Bjorklund and Charles Sterck, a CPA who is an expert on investigating employee theft.

Charles: I think that people who steal particularly ordinary people working for ordinary organizations over time give themselves away. The first time they do it, they’re scared to death; their palms are sweaty; they’ve got beads on their forehead, right? You could imagine that vision.

Chris: Heart, yeah…

Charles: Heart palpitating…

Chris: Pumping, yeah…

Charles: The next time, it’s a little easier. The third time is easier and easier and easier and pretty soon it’s you know what? I could do this. It’s no big deal and it gets bigger and bigger and bigger and so I think that in those situations, it’s not unusual to find that these people’s lifestyle starts to change. Well, you know, let’s face it. We’re all grownups. We live in a real world. We know what people make. If you worked with somebody for any period of time, you know what their lifestyle is. If they start living beyond their means, I think that’s a little bit of a sign. How is this happening? Did they inherit something? Did they win the lottery?

Chris: New clothes…

Charles: New clothes, new cars, super friendly with your vendors maybe or perhaps when the delivery people come, they make a physical move to go out there and interact with that person when maybe it’s not part of their normal function.

Joel: What other behavior should you look for? You tell me. Take a look at this clip.

[video]

Joel: What’s the lesson here? AllBusiness’ fraud expert, Tracey Coenen, says that chronic dissatisfaction with one’s position, duties, co-workers, or supervisors can be cause for concern. Employees who are generally unhappy at work or who feel unfairly treated can more easily justify stealing from the company. And what’s this clip saying?

[video]

Joel: Fraud expert Coenen says pay attention to employees who are always the first to arrive or the last to leave. The employee who looks for an excuse to linger at work in order to be alone could pose a problem. Now that you know some of what to look for, here’s some suggestions on how to stop it. Let’s listen again to Chris Bjorklund and to Charles Dirk.

Charles: As a matter of policy, I would tell business owners that everybody on their team should absolutely go on vacation every single year. Now you might say, “Well what’s the big deal about going on vacation and why would you want somebody to leave your premises when they can be productive and make money?” Well, the fact of the matter is, is that if somebody has set up a system to steal from you, they can’t do it while they’re on vacation. Somebody else comes in and takes that position, cross-training will also help with this where you move around functions…

Chris: That’s a good idea.

Joel: Another safeguard you can do is restrict access to accounting systems and financial assets and perform thorough background checks. So remember, pay attention to unusual behavior and protect yourself and your company.

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